By Karla Miller, Special To The Washington Post
Q: Regarding the new overtime pay rule that goes into effect on Dec. 1: Does this rule apply to businesses with fewer than 75 employees?
A: This question appeared in my inbox three months after the Department of Labor announced that most workers earning less than $47,476 a year will become eligible for overtime pay, regardless of job title or duties, starting Dec. 1.
The rule has been met with cries of dismay from employers of all sizes objecting to the cost and administrative burden of this sudden threshold increase. Yet a surprising number of small-business owners still seem unaware of the change. “Inevitably, when speaking [at small-business events], I hear, ‘This is the first I’m hearing about this,’ ” says Elizabeth Milito, senior executive counsel for the National Federation of Independent Business.
In late September, 21 states and a coalition of business groups led by the U.S. Chamber of Commerce filed suits against the rule, and bills have been introduced in Congress to delay its implementation. But employers can’t count on a reprieve, and playing chicken with the Dec. 1 deadline “could be a very expensive mistake,” Milito warns.
Back to this reader’s question: Size matters not. The new overtime rule applies to any entities or individuals who are subject to the Fair Labor Standards Act. Unlike Title VII or the Americans With Disabilities Act, both of which apply to companies with 15 employees or more, the FLSA applies to:
—any enterprise with an annual gross volume of sales or business totaling $500,000 or more, plus hospitals, schools and government agencies, and
—individual employees engaged in interstate commerce or in producing goods for interstate commerce.
Don’t think your workers are engaged in interstate commerce? Guess again. According to the Department of Labor’s eLaws website, engaging in or producing goods for interstate commerce includes, among other activities, using a phone, fax, U.S. mail or email to communicate across state lines; authorizing credit card purchases; providing security at an airport; and even performing janitorial work in a bus terminal. And the DOL estimates that of the 4.2 million workers the rule will affect, 1.6 million work for small entities. So your best bet is to assume the rule applies to you, and get cracking on complying.
But don’t panic. The DOL and the Small Business Administration’s Office of Advocacy have produced webinars for small businesses. You can get up to speed by watching these and reading the Labor Department’s user-friendly guides, fact sheets and FAQs at www.dol.gov/whd/overtime/final2016. And even if you can’t afford an HR team, a number of HR software products are available to help you prepare for the new rule.
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