On June 9th the U.S. House Committee on Small Business held a hearing titled, “Damaging Repercussions: DOL’s Overtime Rule, Small Employers, and their Employees.” The hearing addressed the repercussions of the U.S. Department of Labor’s (DOL) recent overtime rule on the small business community.

In his opening statement, Rep. Steve Chabot, R-Ohio, committee chairman, outlined his concerns with the rule and said, “Countless small employers, including small businesses, small nonprofits and small local governments, do not have the profit margins or the budget flexibility to increase currently exempt workers’ salaries to the new salary level… This means that many workers – particularly entry-level managers – will have reduced flexibility, reduced paycheck certainty and reduced benefits, as well as fewer opportunities for career advancement.”

In his testimony, Macre echoed the chairman’s sentiments and detailed the National Federation of Independent Business’ (NFIB) projections for the rule. “NFIB estimates that the new rule will impact approximately 40 percent of small businesses while the DOL has said the rule could affect more than 4 million employees.

“Instead of increasing wages for certain employees, as the DOL might project, the rule will force small business owners to take more control of employee hours and benefits to keep costs in check. These controls could ultimately result in employees taking home less money annually. And don’t underestimate the impact on employee morale, as affected employees are told they must now punch a time clock for the first time in their careers.”

In response to questions about the overtime rule, ASA hosted an interactive webinar on June 15th. Participants heard from Brian Farrington of Cowles & Thompson’s Employment Law Practice Group in Dallas; Darrell Amberson, president of Operations at LaMettry’s Collision in Minneapolis; and Ed Cushman, president of C&H Foreign Auto Repair in Spokane, Wash.