Labor Department’s New Rule Set To Take Effect December 1
The Hill reported that the administration’s new overtime rule is set to take effect on December 1 and, according to the article, businesses are now “scrambling to comply.” The overtime rule “more than doubles the Fair Labor Standards Act pay threshold for who can qualify for overtime, from $23,660 to $47,476 a year.” In light of this major potential increase in labor costs, many small business owners are “crunching the numbers to avoid taking a financial punch when 4.2 million workers, by a Department of Labor estimate, become newly eligible for overtime pay.” There are two options that employers have in order to avoid paying overtime, “change salaried workers to hourly employees to better monitor how much they work, or bump workers’ pay to above the new limit.” However, businesses will be faced with even more labor adjustments in the coming years, The Hill noted, as the new overtime rule stipulates that there will be “an automatic increase in the salary threshold every three years starting Jan. 1, 2020.” In her Washington Post Magazine column Karla Miller addressed the issue of the overtime rule as applied to small business owners, many of whom are still unaware of the rule change. NFIB Senior Executive Counsel Beth Milito said, “Inevitably, when speaking [at small-business events], I hear, ‘This is the first I’m hearing about this.’” While Miller noted that “21 states and a coalition of business groups” have filed suit against the rule, and legislation was introduced in Congress to delay its enactment, “employers can’t count on a reprieve,” meaning being prepared for compliance on Dec. 1 is best.
What This Means For Small Businesses
Although the overtime rule is a burdensome mandate that should be delayed or repealed, for now small business owners must prepare for a Dec. 1 implementation of the rule. Tell Congress to delay the rule now >>
Additional Reading
NFIB has published advice for small business owners on how to comply with the new overtime rule.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.
