Colorado job creators to feel the squeeze from new federal regulation

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DENVER — The U.S. Department of Labor yesterday announced a new rule concerning overtime pay for Americans making under $50,000. What was designed to help these workers already looks far more likely to hurt them instead.

Under the new regulation, salaried workers who make up to $47,476 per year will be required to receive time-and-a-half overtime pay whenever they exceed 40 hours per week in the workplace.

While this sounds like a positive step toward protecting hard-working Americans in the labor market, the labor market itself is almost certain to adapt. In doing so, the very Americans who need work the most are likely to find themselves with fewer options – and fewer hours – to do so.

As Andrew Volin, a partner in the Denver office of Sherman & Howard and an expert in wages and compensation, explained to the Denver Business Journal:

“A natural reaction

[by workers] is, ‘hooray, the government just gave us a raise, but that might not turn out to be true.”

Later in the same piece: “Once the rule goes into effect Dec. 1, employers could slice and dice the numbers, Volin said. Some current exempt workers could see their status shift to hourly, and they will have to keep track of their hours worked on a daily and weekly basis, Volin said. Others may keep their salary, but their hours might be cut, along with other elements of their compensation, like benefits.”

Kelly Maher, Executive Director of Compass Colorado, shared in Volin’s concern:

“This is the latest example of government ‘helping’ that will prove to be anything but. Small business owners across Colorado and the nation will be adversely impacted by this to a degree that their hiring practices will change. And guess who that won’t benefit? The very workers for whom this regulation was supposed to protect.

“You’ll see it in Colorado, and throughout America: full-time workers are going to have their hours cut or have their job replaced by two part-time employees. Who, exactly, does that help? Don’t ask me; ask the labor czars in Washington who continue to demonstrate zero understanding of how business works.”

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May 19th, 2016|All|