Small business owners are rushing to get their companies — in particular their employees — ready for an upcoming change in overtime rules.
With federal regulations that are expected to affect the paychecks of 4.2 million workers going into effect Dec. 1, human resources consultants say they’re seeing a surge in calls from owners seeking help in complying. Many business owners have procrastinated, hoping Congress might put the regulations on hold or a federal court would take a similar step in response to a lawsuit filed by a coalition of 21 states. But with five weeks to go, there’s no indication owners will get a reprieve.
“We’re telling clients, ‘You need to get your act together. This is happening,'” says Rob Wilson, president of Employco, an HR provider based in Westmont, Illinois.
Chris Williams, a Travelers executive whose job includes educating business owners about labor law compliance, recently encountered proprietors at a human resources meeting who didn’t know the law was changing.
“The question was raised of the audience, ‘How many of you are ready for this rule?’ Only about 50 percent raised their hands,” Williams says.
The regulations about double to $913 a week from $455 the threshold under which salaried workers must be paid overtime. The higher level is intended to offset inflation, which has eroded the old limits. In annual pay terms, it rises to $47,476 from $23,660. But there won’t be a blanket increase for all workers whose pay falls below the new threshold — federal regulations specifically exempt some employees like computer programmers and office workers from having to be paid overtime. Many employees who will become eligible for overtime work in restaurants or retail as managers or supervisors.
Owners are looking for ways to comply with the law without seeing their labor costs soar. Some with employees whose salaries are close to the $47,476 threshold may give them small raises to keep them exempt. Others may switch salaried staffers to hourly pay and keep a close eye on their schedules to avoid running up big overtime bills. In many workplaces, owners may redistribute some tasks so no one has to stay past the end of a shift.
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