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The Obama administration’s initiative to raise the number of hours enabling overtime eligibility for American workers is causing a stir within small businesses throughout the United States, particularly in the franchise industry where franchisors are awaiting the official proposal from the Labor Department to determine what impact that will have on the franchisee-owned locations in their systems.
The anticipated proposal would nearly double the amount that a salaried employee could make in a week and still qualify for overtime compensation, from the current $455 to $970, and would extend overtime protection to roughly five million more employees. President Obama discussed the issue in a recent op-ed column in the Huffington Post.
The Wall Street Journal reported on the proposed overtime rule change, and the reaction from business owners that the new rule could curtail job growth in a slowly expanding economy.
“The rules are going to force more people into part-time work, and we’re already seeing that with Obamacare,” Scott Gittrich, Founder and President of Toppers Pizza, told the Wall Street Journal.
Gittrich added that Toppers would need to adjust schedules and base wages to contend with the increased labor costs tied to the overtime extension. Similarly, White Castle told the WSJ that they estimated costs between 8 and 12 million as a result of the rule change.
The unveiling of the proposed rule will be followed by a comment period that is expected to last months.
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