Business leaders brace for impact of new overtime regulations

New regulations affecting overtime pay for salaried workers were the topic of discussion at last week’s “Business Before Hours” event, hosted by the West Orange Chamber of Commerce.
By: 
Jul. 26, 2016

Business owners from around West Orange gathered at Bella Room in Winter Garden for a “Business Before Hours” breakfast July 13.

The topic at hand was one that may have a profound impact for the economic landscape of the local business community — new regulations regarding overtime pay for salaried workers. 

The regulations, and their varying implications, were discussed at length by David Billsborough, of DRB Benefits, a Winter Garden-based firm specializing in employee benefits solutions. After Billsborough gave his presentation, he mingled with audience members — many of whom he said are business owners who will be affected by the new regulations.

“Every employee in America — if they’re not making $913 a week — they’re subject to these new overtime rules,” Billsborough said. “What was the general response? ‘Oh my goodness, I realize that I’m ill-prepared and I’ve been ill-advised.’ … For a lot of folks, it was their initial wake-up call.”

Estimates suggest that upward of 4.2 million white-collar workers across the country will be affected by the new regulations, which are a modification upon the Fair Labor Standards Act and take effect Dec. 1. The changes focus mainly on the threshold at which employees become exempt salaried workers — taking the benchmark from $455 per week currently to $913 per week, or $47,476 annually.

For employees who do not get a raise to meet the new threshold, there will be reclassification options that will ultimately involve more oversight of when employees are and are not working — to compound the obvious monetary effects of the regulations.

“More than mathematically, I think the invasion for most employers is a cultural invasion,” Billsborough said. “You’re going to have to go to a group of people and say ‘I’m sorry, this has nothing to do with what I think about you and your work, but I’m being told that I have to watch when you come to work and when you leave — and I have to monitor when you do and don’t work from home.’”

That particular element of the new regulations is one that may particularly rankle employees who now will need to comply with more oversight of when and where they are working — some of whom also will be reclassified to hourly employees.

“They feel like, in many ways, it’s a demotion to their skill set.” Billsborough said.

Paramount for any local business that will be dealing with the new regulations is education — for the business owner, for managers working with employees and for the employees themselves, he said. A growing area of litigation involves employers having to contend with employees suing them if they don’t believe they are living up to their end of the compensation package.

“If you have a small company and you have 20 employees — you have 20 potential whistleblowers,” Billsborough said. “The incidences of employer intrusion by regulatory bodies is much greater with this type of regulation.”

To offset these occurrences, training and education is stressed and Billsborough says it is important for local businesses in West Orange to start taking steps now, ahead of the Dec. 1 start date for the new regulations.

 

Contact Steven Ryzewski at sryzewski@orangeobserver.com.