OVERTIME RULE WILL INCREASE COSTS AND PUSH SALARIED EMPLOYEES INTO HOURLY JOBS
DES MOINES (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 employees might find themselves sliding back into hourly jobs.
“Small businesses everywhere will be affected, but most of the damage will occur in places like Iowa where the cost of living is much lower than major metropolitan areas. Once again, Iowans will be disproportionally impacted by Washington D.C. thinking that a one size, fits all approach to business is appropriate,” said NFIB Iowa state director, Kristin Failor. “We anticipate that entry-level management positions will become scarce thanks to this regulation, and the employees impacted 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.
“Obviously that means higher labor costs yet again for Iowa small businesses. Regardless of whether they’re generating more revenue, the increase in costs will have to be offset one way or another and consumers are sure to notice,” said Failor. “Many small employers are struggling now, and they’ll have to make the tough choice to increase prices or negatively impact the very same workers whom the Department of Labor thinks they are helping.”