Small businesses seek to delay OT rule
New rule will make more workers eligible for time-and-a-half
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.