President Obama’s proposed overtime reform has some U.S. small business owners worried that difficult choices may lie ahead.
President Barack Obama’s recent proposal to raise the threshold for overtime pay in American workplaces has some U.S. small business owners worried that difficult choices may lie ahead. The Obama administration's proposed change in overtime regulations has led to concerns that businesses may be forced to put salaried managers on shifts, limit their hours and make successful business management more difficult.
The plan issued by the Labor Department last month would nearly double the threshold at which salaried workers must be paid overtime, from $455 a week to $970 a week. Several small business owners told the Associated Press the proposed change would force them to alter how they pay staffers, cut their hours or eliminate perks like bonuses because they don't have the money for overtime for employees who routinely work 45 or 50 hours a week. The proposed change would be particularly hard for owners who rely on managers to oversee their day-to-day operations, and could also force some owners to raise prices or cut services, the AP reported.
At MOOYAH Burgers, Fries & Shakes restaurants, the question is whether to put six managers on hourly status or raise their salaries so they're above the proposed threshold, Chief Operating Officer Michael Mabry told the Associated Press. Mabry is concerned that putting managers on shifts, and limiting the time they can spend on the job, would hurt their ability to help make strategic decisions about running the restaurants.
"If we put a cap on how many hours they can work a week, I'm afraid that we'll make a penny-wise and dollar-foolish decision," Mabry said.
The proposed regulations would likely have the biggest impact on small businesses in the middle of the country, where pay scales tend to be lower than in the East and West. The new regulations are unlikely to become final until early 2016, after the public has had a chance to comment on them, the AP reported.