New overtime rules announced Wednesday by the Obama administration could have a negative impact on local businesses according to the St. Joseph Chamber of Commerce.
Under the new rules the annual salary threshold at which companies can deny overtime pay will be doubled from $23,660 to nearly $47,500.
That would make 4.2 million more salaried workers eligible for overtime pay. The rules are meant to decrease the number of workers who can be classified as managers and forced to work long hours at a flat hourly rate. The White House estimates that the rule change will raise pay by $1.2 billion a year over the next decade.
Pat Lilly, President and CEO with the St. Joseph Chamber of Commerce said the new rules will impact small business owners most.
“Unfortunately what the implication is, is that employers who are now able to appropriately compensate employers with overtime as long as they are at a certain income level will now find themselves having to potentially increase wages substantially and/or finding another method to compensate their employees; potentially lowering base pay and making up the difference with overtime or perhaps even having to layoff employees,” Lilly said. “The worst part about the rule change in my opinion is that it will most likely have the greatest effect on small businesses and non-profit agencies.”
He said the St. Joseph Chamber has been vocal against these rules for some time.
“We have submitted information to the Department of Labor, we have worked with the U.S. Chamber of Commerce to sign letters to the administration as well as Congress,” Lilly said. “We’re going to continue to fight this for as long as we possibly can just because of the unfairness it represents to employers.”
The new rules take effect Dec. 1. Lilly said the St. Joseph Chamber plans to hold an event sometime during the month of June to talk about the new regulations.
“One of our Lunch & Learns will provide at least some initial opportunity for people to learn more about the rulings,” Lilly said.
He also suggests individuals check out the Department of Labor’s website to learn more.
(AP and POST)