What is the DOL Seeking to Do?
- DOL wants to make any salaried worker who earns less that $50,440 eligible for overtime. Currently, the overtime threshold is $23,660. DOL’s new rule is an inexplicable 110% increase!
- The new rule would also permanently link the overtime threshold to the 40th percentile of earnings for full-time salaried workers. This means the overtime threshold would increase every year going forward
- DOL has said the rule will be released and go into effect later this year.
How could this affect my business?
- NFIB estimates that about 40% of small businesses will have employees newly eligible for time-and-a-half overtime pay. If a business cannot afford to pay managers over $50,000 per year, the business will have to change these employees from salaried exempt to hourly nonexempt employees and prohibit overtime work.
- In order for small businesses to avoid the costly overtime pay, managers moved from their salaried positions to hourly jobs will need to keep time cards and be prohibited from working overtime. This will be a burden for businesses who depend on managers and supervisors to work when needed in exchange for flexibility and other benefits.
- Worker morale would likely decline. NFIB anticipates the proposed changes, if finalized, would especially hit low-to-mid level managers. These managers may currently make less than the $50,440 proposed threshold, but enjoy perks such as flexibility of hours and benefits like health insurance.
- Fewer salaried, managerial positions would signal to employees that there is little opportunity for growth at the company.
What is NFIB doing to fight the proposal?
- NFIB filed a letter with DOL vehemently objecting to the proposed new rule. We are now educating members of Congress about the devastating impact the rule will have on small businesses, and just as importantly, how their employees- the very people this rule is aimed at helping.
- Act now! Add your name to the thousands of Americans who are telling leaders in Washington about the devastating impact on workplace opportunity. We want to stop DOL from issuing the new rule.
For more information, please visit the following links:
- A quick 30-second video from our Small Business Legal Center on the new overtime rule
- NFIB’s general policy on FLSA reform
- Read NFIB’s basic guide on labor laws for small business
Overtime Rule in the News:
- NFIB: NFIB Warns that Overtime Rule Punishes Full-Time Workers, Discourages Promotions
- NFIB: The 1% of Obama’s New Overtime Rule
- NFIB: Is Obama’s New Overtime Rule Bad for Small Biz?
- USA Today: Obama orders overtime rule changes
Street Journal: Obama Orders Labor Department to Improve Overtime Rules
Times: Obama seeks middle class support by extending overtime pay
Business: Business Groups: Overtime Expansion Means Fewer Jobs
News: Overtime Pay Would Reach More Workers Under Obama Order
Street Journal: The President Goes to Overtime
- NFIB: Overtime Pay Changes May Soon Affect Small Businesses
- NFIB: Managers, Analysts May Have To Keep Track Of Hours As Eligibility For Overtime Expands