Small Businesses Fight Back Against Overtime Rule

Date: September 14, 2016 Last Edit: September 15, 2016

NFIB Seeks Deadline Extension On New Labor Department Regulations

In May, the Labor Department announced its final rule adjusting its overtime pay regulations. The rule, set to take effect December 1, will expand the annual salary cap for US employees to be given overtime from the current level of $23,660 to $47,476. This massive increase in overtime eligibility is expected to make at least 4.2 million US workers overtime-eligible overnight. Businesses large and small will feel the pain from this rule, but small business owners in particular will bear the brunt of these new regulatory costs. Now, the NFIB is fighting back against the mandate.

USA Today reports that the group is urging the Labor Department for a delay in implementation of the new rule until June 1, 2017 so that small business owners may have time to adjust accordingly. In its petition before the Labor Department, NFIB said that large corporations “may prove able to cope with the new (rule) in a 25 week window of time,” but that “the department cannot reasonably expect America’s small businesses to match them.” NFIB President and CEO Juanita Duggan points out, “In many cases, small businesses must reorganize their work forces and implement new systems for tracking hours, record keeping, and reporting. They can’t just flip a switch and be in compliance.” NFIB Media Communications Director Jack Mozloom explained that small businesses have particular difficulties in facing new overtime regulations. For example, many small businesses may not “understand which of their workers qualify for overtime based on the executive, administrative and professional exemptions,” or may not yet have systems in place to start tracking employees’ hours to remain in compliance.

As The Hill reports, the NFIB petition notes the “arbitrary” nature of the December 1 deadline, with NFIB President and CEO Juanita Duggan arguing, “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. 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.”

What This Means For Small Businesses

Small businesses can hardly afford the cost increases the Department of Labor’s new overtime rule will create. It remains to be seen whether the Labor Department will be willing to listen to the NFIB’s reasonable request and provide America’s job creators with a deadline extension to allow them to come to best decide how to implement new overtime requirements into their business plans.

Additional Reading

Workforce Management recently reported on some of the challenges the new overtime requirements present for US small businesses.

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.

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