Just a few weeks after he announced that he would sign an executive order to slowly increase the federal minimum wage, President Barack Obama is once again trying to change the ways in which Americans are paid by their employers. While this could be great news for workers, it may also become a cause of concern to many small business owners across the country who are already wondering about the impact on their bottom lines caused by the minimum wage hike.
Specifically, the White House would like to see supervisory employees with pay of more than $455 per week – who are currently exempt from the time-and-a-half pay granted to other workers because they are salaried – become eligible for overtime pay, according to a report from the Associated Press. That level was actually increased to its current state during the George W. Bush presidency, and any new changes recommended by the U.S. Department of Labor about the new threshold increases, and changes to what types of workers constitute supervisors, wouldn’t be put into place until sometime next year.
“What we know right now is the threshold has been eroded by inflation, and there 3.1 million people who, if the threshold had kept up just with inflation, would automatically be covered by overtime provisions,” Betsey Stevenson, a member of Obama’s Council of Economic Advisers, told the news agency.
No clear numbers yet
Right now, there is little indication of exactly how much the Obama administration will increase the current level so that more workers are eligible for overtime, but it seems as if the change could be massive, the report said. Some economists believe that the limit could rise to as much as $1,000 per week, meaning that those currently making $52,000 per year would be eligible. With inflation adjustments taken into account, that would put the current number in line with those in 1976, when the only previous changes prior to the Bush administration’s were made.
Of course, this could also have a major impact on many owners’ bottom lines, and as such it might prompt many to seek out new ways to cut company costs overall. They might be wise to include shopping around for more affordable small business insurance in their pursuits, as reducing expenses for general liability insurance, for instance, could end up saving them thousands of dollars annually.