New Overtime Rules Burden CA Small Businesses

Money

The Department of Labor’s new overtime rules come at a jarring time for California businesses which have seen recent changes in California laws to increase both the minimum wage and mandated leave. Small business employers can’t catch a breath before a new mandate comes down affecting their employees and ultimately their bottom line.

The Department of Labor’s new rule allows workers earning $47,476 annually time-an-a-half for every hour they work beyond 40 hours. The previous annual salary threshold for requiring time-an-a-half pay was $23,660.

National Federation of Independent Business California State Executive Director Tom Scott said in a release responding to the new rule, “We see this as particularly troubling here in California where the cost of doing business is already prohibitively high. Small businesses are still grappling with the news of a $15 minimum wage; now they have to go through each salary exempt position and decide which employees they have to shift to hourly workers. This will adversely affect workplace morale as many will view this adjustment as a demotion.”

However, there is a way for employees of all stripes to get a pay increase without affecting a businesses bottom line. Unfortunately, because of the increased burdens California businesses face more businesses are looking at this benefit for their employees: Move to a state with no income tax.

If an employee receives the same wage in, say, Texas or Nevada, which have no income taxes, more money stays in the employees’ pocket. It’s like a pay raise without the companies increasing payroll.

Too many California businesses are doing the math because of the constant attack on their bottom line.

Originally published by Fox and Hounds Daily