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Overtime Regulations Proposal Could Impact Small Businesses

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July 21, 2015—A proposed change in overtime regulations could lead to big changes for small businesses, according to a report by USA Today.

The plan, which was issued by the Labor Department last month, would raise the threshold at which salaried workers must be paid overtime to $970 a week from $455. Salaried employees who earn below $970 a week could be exempt from overtime if they’re office workers doing administrative tasks, outside salespeople or executives.

USA Today reports that the proposed plan is causing some small business owners to change how they pay staffers, cut hours or eliminate perks, like bonuses, to cut costs. The owners who do end up paying overtime may end up passing the added expenses to customers.

The report said the overtime proposal will likely have the biggest impact on small businesses in the middle of the country, where the pay scale is lower.

The proposed regulation won’t become final until early 2016, after the public has had a chance to comment on it, according to an employment law attorney.

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