President Obama's coming overtime-eligibility rule could be gradually implemented, instead of all at once.
A raise to the Fair Labor Standards Act rules is set to change the overtime eligibility threshold from $23,660 to $47,476 on Dec. 1, a transition that has led many businesses to say they needed more time to adjust. A federal bill introduced by U.S. Rep. Kurt Schrader (D-OR) would ease thenation into the increased threshold over the course of four years. It would start this December by setting the eligibility threshold at $35,984.
National Federation of Independent Business Illinois Director Kim Clarke Maisch said the new changes coming in December will hit small-business owners hard. "We believe about half of all small-business owners in this country have at least one employee that would be affected by this new regulation," Clarke Maisch said. "If there are no changes to this threshold by December, small-business owners are going to have a very difficult time adhering to the new rule."
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Clarke Maisch said Schrader's bill would give Illinois employers time to accommodate the increased cost of doing business. "It certainly gets to the end goal that many Democrats want, but it also takes into consideration the needs of small employers, who we desperately need to keep hiring," Clarke Maisch said.
The rule change also would affect the state budget. Information obtained from the Illinois comptroller's office shows that nearly 9,800 salaried state employees could be eligible for overtime this December, barring any exemptions. A representative from Illinois State University said it isexpecting up to $2.2 million in new annual costs to get their approximately 275 eligible employees compliant.
The bill also would do away with the automatic cost-of-living increases to the threshold every three years. Schrader has received scrutiny from labor organizations such as the AFL-CIO for sponsoring the bill and will no longer comment publicly on it.