Proposed Overtime Rule Changes Would Harm Small Businesses and Their Employees

Date: May 11, 2016

NFIB Applauds Senate Small Business Committee for Examining Rule

For Immediate Release
Andrew Wimer, 202-314-2073 or 703-298-5938 (cell)
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Washington, D.C. (May 11, 2016) – Proposed changes to the Department of Labor’s overtime rule would do little for small business employees while making it harder and more expensive for small business owners to run their company. The National Federation of Independent Business (NFIB) opposes the proposal and appreciates the Senate Small Business Committee’s hearing this morning to examine the rule’s effect.

“Struggling small business owners can’t afford to pay more in overtime pay just because the Department of Labor says they should,” said Beth Milito, Senior Legal Counsel at the NFIB Small Business Legal Center. “Businesses can only afford more in payroll if they increase revenue, something government is powerless to make happen. The administration shouldn’t pat themselves on the back about giving workers raises. Most small business owners will have to limit employees’ hours and career opportunities.”

The NFIB Index of Small Business Optimism rose slightly in April but is still not back to 42-year average even seven years after the end of the recession. While the overall Index rose, even fewer small business owners expect economic conditions to improve in the coming months. Also according NFIB research, 44 percent of small business owners say that one or more of their employees have salaries under the proposed threshold for workers exempt from the overtime rule.

To avoid costly overtime pay, small business hours will have to strictly limit hours. This may mean investing in costly new personnel systems. It could also discourage employers from promoting employees into manager positions in the first place. Overall, the increased threshold could reduce flexibility in many workplaces.

“The Department of Labor is oblivious to the consequences of a radical change to the overtime rule,” said Milito. “We are grateful that the committee is focusing on the harms that could be done if the rule is finalized. The government keeps making owning and operating a small business harder, it’s a wonder that anyone can wade through all the red tape to make it happen.



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