How New Overtime Regulations Will Affect Small Businesses

office at night representing overtime regulations

Recently, the U.S. Department of Labor announced new legislation mandating overtime pay at time and a half for salaried employees who work beyond the traditional 40-hour workweek.  Employees were previously excluded if they were salaried, earned at least $23,660 per year, or were in positions considered executive, administrative or professional. [i]

Scheduled to go into effect December 1, the new rule increases the salary threshold for overtime eligibility to $47,476 – extending overtime protection to an estimated 4.2 million workers.

How the New Rules Will Affect Small Businesses

Mandating overtime pay could negatively affect small businesses and deter owners from granting employees pay raises in the long term. While some entrepreneurs may opt to convert salaried employees to hourly wages in the wake of the change, others might decide that raising salaries above the $47,476 threshold is better than tracking hours and paying overtime.

Some businesses might choose to hire temporary staff or contractors to cover overtime hours that other workers would normally take. The change could also sway business owners to cut salaries or benefits in order to continue paying overtime. [ii]

Solutions to Help Make the Process Easier

Having to switch over from salaried payments to hourly payments is a tough job for small business owners lacking proper technology solutions. Secure technology solutions that used to be reserved for only the largest employers is becoming a required tool for small businesses and all insurance brokers.  The broker of 2016 that attempts to conduct business the old fashioned way with paper will not survive in today’s market.

Ease’s automated onboarding tool and recently announced real time Electronic Data Interchange (EDI) connection are reimagining employee benefits. By streamlining the administration of HR processes such as payroll and overtime pay, these new integration capabilities will significantly save time that is often wasted on laborious tasks. With Ease, a process that took weeks to complete can now be finished in a matter of minutes.

Ease is a cloud-based SaaS platform providing benefits and human resource management to small businesses. For further information on how this technology can assist your business and save you time, visit or call 1-800-446-EASE (3273).


[i] Uzialko, A. C. (2016, May 31). What You Need to Know About the New Federal Overtime Rules.

[ii] How Will New Overtime Rules Affect You? (2016, May 25). http:/