Total Team Solutions Blog

Overtime Rule Change 2016

By: Rob Lynn

 

“I’m from the government, and I’m here to help” and while intentions are good, sometimes a helping hand winds up with unintended painful consequences for those small & mid-sized businesses trying to create more jobs.  For example, the Department of Labor’s proposed overtime rule, which the Obama administration claims will extend overtime eligibility to five million workers.

Under current regulations, a worker qualifies for overtime pay if his or her wages for  a 40 hours of work per week fall below $23,660 threshold.  The proposed rule would more than double to $50,440 when the regulation comes into effect 2016 and from there, increases will change annually to maintain the threshold at 40^th percentile.

What this arbitrary & intrusive regulatory change does not consider is the impact on employers and the potentially harmful consequences for workers.  Many employers won’t be able to absorb the increased labor and litigation costs which will reduce the opportunity for growth and could curb hiring.  Those newly eligible for overtime may find that they lose hours, healthcare, retirement benefits, and actual income earned.

Government wage mandates are not the answer to a strong middle class.  Pro-growth policies that enable employers to expand, invest and create more high-paying opportunities for workers is the appropriate long term approach to a stronger middle class.  Common sense legal reform, simplification of the tax code with long term investments in our infrastructure is the best way forward…to bad Washington can’t get out of our way.

 

  

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