Delaware Business Insurance Update from CNC Insurance Associates " New OT Rules A Possible Headache for Small Business" 5-30-16

With the new overtime regulations just signed by President Obama, small business owners should get ready for the headache that is about to hit. Business owners now have to pay overtime for salaried workers that make under $47,476 a year. This will surely put pressure on small companies and will result is the aforementioned headache.  Labor costs will go up immediately as companies comply with the regulation. Litigation against employers will also go up as record keeping errors and disputes over wages and hours will result. So what will small business owners do?  Many will reduce staff to help pay for the additional costs. Some will move people into part time status. Many will also put a freeze on hiring. For the salaried workers it will trigger higher wages. The Labor Department estimates that over 4.2 million people will see raises due to this regulation. Unfortunately, this will most likely not happen. Small businesses will adapt to keep their labor costs down in order to stay in business. Most companies do not have the ability to raise their prices as quickly as needed to comply with the law. Until next time be careful out there and know your risks.


G. Kevin Nemith,  President CNC Insurance & The Small Business Insurance Center
Serving DE, PA, NJ, VA & MD
www.cncinsurance.com
www.bizinsurancetv.org

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