OVERTIME RULE WILL INCREASE COSTS AND PUSH SALARIED EMPLOYEES INTO HOURLY JOBS
PORTLAND (May 18, 2016) — The National Federation of Independent Business (NFIB) today warned that the Department of Labor’s new overtime rule, released late Tuesday evening, will mean higher costs for small employers and that some salaried employees might find themselves sliding back into hourly jobs.
“Not only will entry-level management positions dry up thanks to this regulation, but those employees will fall back into hourly jobs, and it’s anybody’s guess how much that will cost at this point” said NFIB Maine state director, David Clough. “Small businesses everywhere will be affected, but most of the damage will occur in places where the cost of living is much lower than it is in major metropolitan areas. This, combined with a potential minimum wage increase means Maine could be disproportionately impacted by this regulation.”
Previously, workers earning $23,660 annually were eligible for time-and-a-half for every hour they worked beyond 40 hours. The DOL has doubled that threshold to $47,476. According to the Obama administration, 5 million more workers must now be paid overtime as a result. On top of yesterday’s announcement, small business in Maine are concerned about the results of the referendum to impose a $12 an hour minimum wage increase, on the ballot in November, that could compound costs for small employers.
“Obviously that means higher labor costs for millions of small businesses regardless of whether they’re making more sales, generating more revenue, or dealing with other rising expenses,” said Clough. “Many are struggling now, and they’ll have to make tough choices that will affect the very same workers whom the Department of Labor and proponents of the minimum wage increase thinks they are helping. Collectively this perfect storm for increasing labor costs add up to even fewer jobs available for those seeking work.”
For more information about the overtime rule, please visit www.nfib.com/overtime. For more information about NFIB, please visit www.nfib.com.
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