Hoosier Small businesses should prepare now for December.
87,000 Indiana Jobs Affected by Overtime Rule
Come
Dec. 1, business owners across Indiana and nationwide will be paying higher
labor costs as a result of the Department of Labor’s new overtime rule. The DOL
estimates the regulation will impact more than 87,000 workers in Indiana.
The
rule will raise the threshold at which employees are exempt from earning
overtime pay—from $23,660 to $47,476. The Fair Labor Standards Act dictates
that employees are not eligible for overtime pay if they are compensated at a
minimum wage level (now $47,476), if they are paid on a salaried basis, and if
they perform duties considered professional, administrative, or executive in
nature. Now, under the new rule, the minimum wage level triggering overtime
exemption is nearly double the old rate.
NFIB
has spoken at length to the media about the harmful impact of this ruling,
including decreased staff morale stemming from employment status changes,
reduced hours, and falling pay rates. Barbara Quandt Underwood, NFIB/Indiana
state director, says the Department of Labor’s new overtime rule is going to
hurt small businesses across Indiana.
“Ultimately,
this new rule reduces opportunities for promotion, reduces workplace
flexibility for many workers, and entangles small business owners in new piles
of paperwork,” Underwood says.
For
businesses that operate on calendar year budgets, this unplanned mandate for
increased labor costs in the final month of 2016 complicates matters.
One
small item of relief: Bonuses, incentive pay, and commissions can account for
up to 10 percent of the salary threshold if the payments are made on a
quarterly basis. However, the exemption level will continue to rise, tied to
inflation, every three years, beginning on Jan. 1, 2020.
For
more information, please visit NFIB.com/Overtime.
