Contact: Jack Mozloom, 202-406-4450 or 609-462-5610 (cell)
NFIB warns that thousands of businesses can’t comply with the Dec. 1 deadline
Washington, DC (September 13, 2016) — The National Federation of Independent Business (NFIB) today formally petitioned the Department of Labor to extend the deadline for complying with its controversial overtime rule, which potentially affects 44 percent of all small employers, many of whom still don’t understand it.
“In many cases, small businesses must reorganize their workforces and implement new systems for tracking hours, record keeping, and reporting,” said NFIB President and CEO Juanita Duggan. “They can’t just flip a switch and be in compliance.”
The regulation, which takes effect December 1, 2016, doubles the pay threshold below which employees are eligible for mandatory overtime. According to NFIB research, nearly half of all small businesses employ at least one person who would be affected.
In a formal letter submitted to the DOL this morning, NFIB explains: “Large corporations with legal, financial, and personnel departments that have lawyers, accountants, and human resource specialists who routinely read the Federal Register and the Code of Federal Regulations, and who command substantial resources for analyzing the legal status of employees and making adjustments to timekeeping and payroll systems, may prove able to cope with the new Final Rule. But the Department cannot reasonably expect America’s small businesses to match them.”
Among the roughly 5.5 million small employers in the United States, according to the Census Bureau, half employ fewer than four people. Nearly a million other businesses employ between five and 10 workers.
“The US economy is a small business economy and many of these firms don’t have the resources, the personnel, or the time to meet the deadline,” said Duggan. “Beyond that, many small businesses are gearing up for the make-or-break holiday season. This is a very costly regulation that is made more damaging by the arbitrary deadline.”
NFIB remains opposed to the rule and its policy team is pushing for legislation to repeal it altogether. The organization also supports bipartisan legislation that would delay implementation. In the meantime, said Duggan, its objective today is to appeal to the Department of Labor for an extension so that small businesses can comply.
“If the Department’s goal is to bring as many employers as possible into compliance, then it should be willing to make this modest accommodation,” said Duggan. “Otherwise, many thousands of small business owners will find themselves suddenly out of compliance and in jeopardy of fines and litigation.”
For a copy of NFIB’s formal petition, please contact Jack Mozloom. For more information about NFIB, please visit www.nfib.com/overtime.