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Overtime pay a matter of fairness, tough for businesses

Rules would take effect Dec. 1
Freshly cut $100 bills make their way down the line at the Bureau of Engraving and Printing Western Currency Facility in Fort Worth, Texas. The Department of Labor could require white-collar salaried managers who make less than $47,476 per year to be paid overtime. The current salary cutoff is $23,660 annually.

Federal rules that would extend

“I think it’s going to have a huge impact on a lot of people,” said Mandy Clark, secretary for Durango Area Human Resource Managers.

The Department of Labor would require white-collar salaried managers who make less than $47,476 per year to be paid overtime – more than twice existing salary cap of about $23,600. Employers would have to pay time-and-a-half for any overtime hours.

The agency announced the final rules this week and they would take effect Dec. 1 unless Congress blocks the rule.

The change would apply to about 73,000 managers in Colorado, according to a White House estimate.

Advocates argue that the change is overdue and needed to ensure people are paid for hours worked and to ensure businesses don’t take advantage of salaried employees. Critics say businesses and nonprofits cannot absorb the change.

“Many people are placed in managerial positions and are short-changed because they are exempt from overtime. The title or promotion really doesn’t mean much when people have to work long hours and are not properly compensated,” said the Maureen Maliszewski, director of the La Plata County Thrive! Living Wage Coalition.

However, some human resource managers said the change may be too sweeping because it more than doubles the current cap and it applies to nonprofits.

At Tri-County Head Start, a federally funded nonprofit, the change would affect all the administrators and specialists, who work many hours of overtime because they are committed, said Clark, the nonprofit’s human resource manager.

“We’re going to have to really restrict what they can and can’t do, and it could have an overall impact on the overall quality,” she said.

Head Start cannot afford to pay overtime or increase salaries because they do not receive enough federal funding, she said.

Other small nonprofits and businesses may face a similar challenges.

The new salary rule and increased health care costs driven by Affordable Care Act, also known Obamacare, may influence hiring decisions. Business could limit how many people they hire or hire part-time employees instead of full-time, said Danielle Kirkpatrick, president of the Durango Area Human Resource Managers.

“They’re not going to be able to afford the same amount of employees. ... That will have an impact on local jobs,” she said.

It may have the largest effect on small businesses that do not have a human resource manager to monitor the laws.

“They haven’t had the time to prepare,” she said.

The salary limit hasn’t been updated since 2004. So it may be appropriate to raise it, said Laura Lewis Marchino, deputy director of the <URL destination="http://www.scan.org/">Region 9 Economic Development District.

</URL>However, it is too soon to know if compliance requirements are going to be burdensome for businesses, said Marchino, who has not taken a position on the rule.

The rule could also be seen as a matter of fairness for those working 50 hours a week who are still struggling financially, said state Rep. Max Tyler, D-Lakewood, who introduced a law last year similar to the federal rule.

“This economy just sucks all the money out of the people who work for a living,” he said.

mshinn@durangoherald.com



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