Small Businesses Seeking More Time to Adopt New Overtime Rule

WASHINGTON, D.C. — The National Federation of Independent Businesses (NFIB) asked the U.S. Department of Labor (DOL) to delay a new rule making millions of Americans eligible for overtime pay, stating employers aren’t prepared to implement new rules when they go into effect Dec. 1.

Instead, the NFIB asked that these go into effect on June 1, 2017.

“In many cases, small businesses must reorganize their work forces and implement new systems for tracking hours, record keeping and reporting,” NFIB president Juanita Duggan told USA Today. “They can’t just flip a switch and be in compliance.”

The rule, released in May, would double the threshold at which executive, administrative and professional employees are exempt from overtime pay to $47,476 from the current $23,660. It’s expected to make an additional 4.2 million workers eligible to receive time-and-a-half wages for each hour they put in beyond 40 a week, the news outlet reported.

The requirement will affect about 44 percent of the 5.5 million U.S. businesses with fewer than 500 employees, NFIB stated. About 3.2 million of them employ 10 workers or less.

But in a statement, David Weil, administrator of the DOL’s wage and hour division, responded officials provided businesses 190 days for businesses to comply, “more than three times what’s legally required. The Dec. 1 implementation date is a sufficient amount of time [more than six months] for employers to adjust to the new salary level.”

“America's workers have waited long enough for a fair days pay for a long days work.”

NACS, the Association for Convenience & Fuel Retailing, previously stated the proposed overtime rules changes "will be devastating to convenience store owners, their workers and customers."

"The regulations, set to be implemented Dec. 1, will double the previous salary threshold for designating managerial employees as exempt from overtime from $455 to $913 a week, an unreasonably high level that fails to follow past precedent of tailoring dollar tests to reflect the financial characteristics of retailing, and thereby ensuring that resulting salary increases not impose a disproportionate hardship to the sector," said Lyle Beckwith, NACS' senior vice president of government relations.

"DOL also relied on measurements of non-salary income and salaries in high-wage regions in formulating the threshold. As a result, thousands of store managers and assistant managers, who are paid annual average salaries of $39,528 and $25,771, respectively, will change virtually overnight from exempt status to nonexempt status," he added.

The National Retail Federation (NRF) is also concerned about the changes, telling the House Small Business Committee that new federal overtime regulations will lead to hiring freezes and layoffs for full-time workers if enacted as planned Dec. 1.

"Proponents of this rule have touted the changes as a welcomed job creator. These claims are riddled with partial truths," said NRF Senior Vice President for Government Relations David French. "Supporters of the rule who celebrate studies predicting a potential increase in part-time jobs fail to acknowledge to the public that any increase in part-time jobs comes at the expense of full-time employees' hours and earnings.

NFIB is a small business association, promoting and protecting the right of its members to own, operate and grow their businesses. It has more than 325,000 members.