Small Business Owners Not Prepared for New Overtime Pay Rules, Manta Survey Reveals

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Department of Labor’s Fair Labor Standards Act adjustment weighs heavily on small business owners, employees.

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“The overtime rules go into effect Dec. 1. We’re finding small business owners are unprepared or worse, unaware of the changes, which has immediate repercussions on so many employees around the country," said John Swanciger, CEO of Manta.

Manta, one of the largest online resources dedicated to small business, released new research today which breaks down the upcoming changes to the federal overtime rule and how small business owners should prepare.

The U.S. Department of Labor’s (DOL) updated overtime regulation states that, beginning Dec. 1, every salaried employee making under $47,476 must receive overtime pay for every hour over 40 they work in a week. This move secures overtime pay for 4.2 million U.S. workers. However, this abrupt adjustment – and the first update to the FLSA since the 1970s – leaves many small business owners struggling to determine how to comply with the new rules.

In its new whitepaper, “FLSA Raises Minimum Salary for Small Business Employees,” Manta surveyed more than 2,200 small business owners to gauge whether the small business community is taking positive steps toward compliance.

“The overtime rules go into effect Dec. 1,” said John Swanciger, CEO of Manta. “We’re finding small business owners are unprepared or worse, unaware of the changes, which has immediate repercussions on so many employees around the country. The good news is that small business owners have time and, if they seek out the right resources, can determine which compliance method works for them before the December deadline.”

According to the data, many small business owners are not actively devising overtime compliance strategies. In fact, 37 percent reported not knowing the new rules exist. Manta’s whitepaper provides insight into the options small business owners have to comply, including:

•Pay overtime per the new rule. The most direct (but potentially costly) option for compliance is simply paying qualified workers overtime beginning Dec. 1. Companies that rely heavily on employees working over 40 hours per week might want to avoid this approach.

•Raise employee salaries. To ensure payroll consistency and avoid surprises, small business owners can raise all employees to the $47,476 threshold. Before making this decision, perform salary vs. hours worked analyses to determine costs savings.

•Institute consistent schedules. By carefully tracking employee time and capping the workweek at 40 hours, small business owners can avoid paying costly overtime or readjusting salaries. In this model, companies may look to hire more workers to account for potential losses in productivity.

“There are a number of resources small business owners can reference to determine what to do in this time of major change,” notes Swanciger. “But with only weeks remaining before the new rules take effect, all small business owners must prepare. Look into hiring labor and employment lawyers and other outside experts, consult the small business association, and use online resources like Manta to evaluate your options for compliance.”

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About Manta
Manta educates, coaches and empowers small business owners to succeed on their own terms by helping them compete, connect with customers and grow their businesses. Our solutions include a small business directory with more than 2.6 million claimed company profiles and a suite of products -- including the Manta Academy and Manta Marketing Pro -- to manage critical business and marketing needs. We strive to inform and inspire through educational courses, proprietary research and content and personalized marketing services.
Thousands of business owners join Manta each month. Visit manta.com to learn why.

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Kaitlin Mansour
Walker Sands Communications
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