There is concern about the cost impact of this proposed rule on employers in Lexington. If adopted, employers may be forced to reclassify employees, pay more in overtime costs or increases salaries to ensure worker exemptions. Employees who are reclassified may be required to track hours leading to additional administrative burdens for employers.
Lyle Hanna, President & CEO of Hanna Resource Group (HRG), operates a professional human resources consulting firm in Lexington. His firm is closely monitoring this rule and potential impacts on businesses.
“This potential change could have a HUGE impact on the bottom line. Organizations will be required to pay more employees overtime or increase their salaries to the new threshold. Increasing payroll costs also increases mandatory expenses including taxes and workers compensation. Additional time and record-keeping duties will also be necessary during this transition,” said Hanna.
Hanna noted the estimated costs to businesses will vary depending on size and industry. “An example of a potential cost to a Lexington-based client with 2,500 employees would be $6.2 million, while another client with approximately 450 employees may have a cost of about $950,000, and a client with 50 employees may be faced with a $50,000 impact,” added Hanna.
Although a final rule has not been approved, it is recommended businesses that will be impacted begin now to access potential costs and communicate those impacts to our Congressional delegation.
“Small businesses would be especially benefited by investigating the cost of the proposed changes, because their resources are much more limited,” added Hanna. “Our company is working closely with many organizations to calculate how a change in ruling may directly affect their business to help with planning.”
If your business will be negatively impacted by the proposed overtime rule change, please contact the offices of Congressman Andy Barr, U.S. Senator Mitch McConnell and U.S. Senator Rand Paul and share your concerns. Although public comment period on this rule is closed, Members of Congress are able to communicate on behalf of their constituents with the U.S. Department of Labor.
More information about the proposed overtime rule change is available on-line at www.dol.gov or www.uschamber.com. If you have questions about how this rule may impact your business, contact Andi Johnson, Vice President for Public Policy, at (859) 226-1614.
Hanna Resources Group has also developed an online tool to help businesses with cost analysis related to regulation changes. If you would like to reach out to HRG for more information, e-mail to email@example.com.
Submitted by Andi Johnson, Vice President of Public Policy, Commerce Lexington Inc.