New Overtime Rule To Impact Small Businesses

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The new rule, which started July 1, extends overtime pay to some salaried workers. Small businesses may feel the brunt of the impact at first, experts say

WASHINGTON – A new regulation established by the U.S. Department of Labor will restore and extend the right to overtime pay to many salaried workers, the department announced.

Overtime protections have been part of the Fair Labor Standards Act since 1938 and were enacted to protect workers from exploitation and to benefit workers, their families and our communities, per the Department of Labor.

Per the Department of Labor, unless exempt, an employee covered by the Fair Labor Standards Act must receive overtime pay for all hours worked over 40 in a workweek at a rate not less than one and one-half times their regular rate of pay.

The department estimates that in the first year, the rule will impose approximately $1.4 billion of direct costs on employers. The department also estimates that the rule will result in an income transfer of approximately $1.5 billion from employers to workers during the first year.

Some workers are exempt from the FLSA's minimum wage and overtime protections, including bona fide executive, administrative or professional employees.