LABOR COSTS TO INCREASE THANKS TO OVERTIME RULE

Date: May 18, 2016

LABOR COSTS TO INCREASE THANKS TO OVERTIME RULE

DOVER (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 workers might find themselves sliding back into hourly jobs.

 

“The last thing Delaware small business owners need is a bureaucratic mandate with a  one size, fits all approach to running day to day operations of a business,” according to Mike O’Halloran, NFIB Delaware state director. “Instead of helping workers, this rule will not only disrupt the job market and cause entry-level management positions to disappear, but many employees currently in management positions will fall back into hourly jobs.”

 

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.

 

“An uptick in labor costs will have to be offset somewhere. Small businesses do not have the ability to absorb this impact without making some very difficult decisions. Delaware employers are already struggling because of economic uncertainty. Ultimately, this ruling will force a decision between increasing prices on consumers or cutting hours, wages or positions for the very same workers whom the Department of Labor thinks they are helping,” concluded O’Halloran.

 

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