Small busi­nesses seek to de­lay OT rule

New rule will make more work­ers el­i­gi­ble for time-and-a-half

USA TODAY US Edition - - MONEY - Paul David­son @Pdavid­sonusat USA TO­DAY

The na­tion’s lead­ing small­busi­ness trade group on Tues­day asked the La­bor Depart­ment to de­lay a new rule mak­ing mil­lions of Amer­i­cans el­i­gi­ble for over­time pay, say­ing em­ploy­ers aren’t pre­pared to im­ple­ment it when it goes into ef­fect Dec. 1.

“In many cases, small busi­nesses must re­or­ga­nize their work­forces and im­ple­ment new sys­tems for track­ing hours, record keep­ing and re­port­ing,” NFIB pres­i­dent Juanita Dug­gan says. “They can’t just flip a switch and be in com­pli­ance.” The group is ask­ing for a de­lay un­til June 1.

But in a state­ment, David Weil, ad­min­is­tra­tor of La­bor’s wage and hour divi­sion, says of­fi­cials pro­vided busi­nesses 190 days to com­ply, “more than three times what’s legally re­quired.”

“Amer­ica’s work­ers have waited long enough for a fair day’s pay for a long day’s work,” he added.

The rule, re­leased in May, would dou­ble the thresh­old at which ex­ec­u­tive, ad­min­is­tra­tive and pro­fes­sional em­ploy­ees are ex­empt from over­time pay to $47,476. It’s ex­pected to make an ad­di­tional 4.2 mil­lion work­ers el­i­gi­ble for time-and-a-half wages for each hour they put in be­yond 40 a week.

The re­quire­ment will af­fect about 44% of the 5.5 mil­lion U.S. busi­nesses with fewer than 500 em­ploy­ees, NFIB says.

About 3.2 mil­lion of them em- ploy 10 work­ers or less.

Large cor­po­ra­tions with “lawyers, ac­coun­tants and hu­man re­sources spe­cial­ists” who read tech­ni­cal fed­eral no­tices “may prove able to cope with the new (rule) in a 25-week win­dow of time,” NFIB said in its pe­ti­tion. “But the depart­ment can­not rea­son­ably ex­pect Amer­ica’s small busi­nesses to match them.”

NFIB of­fi­cials say they still op­pose the over­time rule and sup­port a bill by Rep Kurt Schrader, D- Ore., that would phase in the new salary thresh­old.

In the mean­time, they say small busi­nesses face myr­iad hur­dles as they grap­ple with com­pli­ance. Many don’t un­der­stand which of their work­ers qual­ify for over­time based on the ex­ec­u­tive, ad­min­is­tra­tive and pro­fes­sional ex­emp­tions, NFIB spokesman Jack Mo­zloom says.

Oth­ers haven’t in­stalled sys­tems to track the hours of em­ploy­ees who are now ex­empt from over­time but will qual­ify.

They also must de­cide how to re­spond to the re­quire­ment, Mo­zloom says. Some may con­vert salaried work­ers to hourly, track their hours and ab­sorb the over­time costs. Oth­ers will limit the work­ers’ hours, lift their salar­ies to the new thresh­old to avoid over­time or cut their base pay to off­set the over­time ex­pense.

Nancy Ham­mer, pol­icy coun­sel for the So­ci­ety for Hu­man Re­source Man­age­ment, says Small Busi­nesses Ad­min­is­tra­tion round­tables held across the coun­try and at­tended by SHRM of­fi­cials also have re­vealed that many small firms are not aware of the De­cem­ber dead­line.


Store man­agers are among em­ploy­ees ex­pected to be af­fected by the new over­time reg­u­la­tions.

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