4 Ways The New Overtime Pay Rules Will Impact Your Business

Overtime Pay Rules.

As an employer, are you concerned over the new Fair Labor Standards Act (FLSA) overtime pay rules? In an attempt to make life easier for the employee, the government continues to make life more difficult for the employer. Concerns about the new overtime pay rule cutting into business profits are crossing the minds of all business owners. The new overtime pay rules become effective December 1, 2016 and will make 4.2 million employees newly eligible for overtime pay when working more than 40 hours a week. So what are the effects on your business? And what solutions are available to you?

How This Affects Your Business

1. Your Options Are Limited

The new overtime rule means that businesses will have to choose how to adjust. Employers will have the option of:

  • Paying time and a half for overtime work for a larger share of their workforce
  • Raising workers’ salaries for exempt employees above the new threshold (which will now be $913 per week or $47,476 per year)
  • Limiting workers’ hours to 40 per week
  • Any combination thereof

2. Overtime is Money
The DOL has estimated that to comply with the new rule, employers will spend $592 million on overtime payroll. The money has to come from somewhere. Some businesses find that they will have to reduce salaries so as to compensate for the new overtime pay.

3. Big impact on SMBs
The new FLSA overtime rule will have the biggest impact on small to medium size businesses. Small businesses will not be able to afford raising salaries to maintain the overtime exemption, yet will also struggle to pay the overtime. This, on top of the new Affordable Care Act obligations, leaves many smaller businesses with few options: cut employees, cut work hours.

4. Impact on Telecommuting
Hours worked at home will now have to be monitored carefully by the employer for those who fall under the new FLSA overtime rules. This will require companies to become very creative in their compensation for remote workers, as well as require their staff to more diligently track any overtime that they work.

Looking for a Solution?

Tandem HR provides outsourcing human resource services for businesses headquartered in the Chicago area. Are you looking for ways to survive in the wake of the new FLSA overtime rule? Then look no further. Tandem HR can help analyze your current workforce in order to develop a solution that to prepare for and execute this transition. We are here to provide you with outsourced HR solutions that will help you receive maximum return on investment. This means that you can focus on your business while we take care of HR.

Our services provide four major added values:

  • Reduction in costs
  • Reduction in liabilities
  • Increased benefits for employees
  • High service levels for the client and its employees

The new FLSA overtime rule is no reason for concern. There are options that suit your needs and will protect your profits as well as ensure compliance with the new regulations. With Tandem HR, you will have a partner by your side to address the challenges of the new overtime pay rules. This way, you can concentrate on making your business thrive. Contact Tandem HR today and let us help you reduce the impact of ACA on your business.