OCEAN CITY – Agitation among local business owners is growing in regards to new overtime laws that take effect Dec. 1.
In a meeting with the Department of Labor, Licensing and Regulation attorney David Stevens Wednesday morning, a large crowd of business owners and officials voiced questions and concerns about the local economy’s ability to shoulder the financial changes.
Currently, white collar salaried workers, like those with executive, administrative and professional duties, making more than $455 a week, are not eligible for overtime pay. This threshold will soon increase to $913 weekly.
Any of the 4.2 million U.S. citizens now eligible for overtime pay will receive time-and-a-half for any work that exceeds the 40-hour work week.
Some business owners in the meeting argued that these new laws are not reasonable for the seasonal resort town.
“I believe everyone in this room tries very hard to pay their employees correctly and there may be a few exceptions,” BJ’s on the Water owner Maddy Carder said. “But for this to happen without any say, as usual, in a small business person’s life is just like everything else that the government passes. To heck with the little guy. This country was founded on small businesses, and God bless [the government] is trying their best to get rid of them.”
As complaints continued, others in the room began to play devil’s advocate and justifying the law.
“[The phone] is the devil when it comes to being an employee,” Your Docs In Chief Financial Officer Angela Gianelli said. “If something is wrong, guess what, I can get a hold of them. Before I had to drive in myself and take care of it. Now I can text and send somebody over while they are on their time off. Suddenly, they are back at work, and I gave them no compensation time. I can see both sides of this because sometimes managers out there are abused.”
Even after the results of the presidential election, Stevens said the law is not likely to change soon, if ever.
“It’s not like someone can come in on Jan. 20, and the whole thing goes off the books,” he said. “Even if they wanted to revisit it, you are probably looking at a process that would take many months. In the interim, it is on the books, and it is going forth. There is not an immediate change coming down the pike.”
Stevens said business owners should start preparing their employees for the possibility of pay, policy and overtime changes within the workplace.
Employers will have the option to exempt employees from overtime pay if they meet criteria set by the salary and duties test. But the goal of the new guidelines is to raise low- and middle-class incomes and to incentivize employers to either supply overtime pay to affected employees or to simply raise their salary to avoid paying overtime.
Stevens said there are multiple ways to follow and afford the new rules. But Igor Conev, vice president of Mann Properties, a property management company based in Ocean City, said the new threshold is illogical.
“It’s like someone threw a stick in the air and came up with the number,” he said. “I know my competition. The rate that they charge in Baltimore is significantly higher than our area.”
Stevens said the threshold has not changed since 2004 and was never adjusted for inflation. The new number, however, derived from a formula and will be adjusted for inflation every three years.
“Every three years, people will go out of business because of this,” Carder said. “I am really upset about this because, to me, it is just one more thing. The government is in small business. There are a lot of people who aren’t going to be able to do this.”
The new guidelines take resort businesses into account with seasonal exemptions, but Stevens said these exemptions only apply to amusement and recreational establishments.
State Delegate Mary Beth Carozza said she would take concerns and complaints from the meeting to the state legislature as well as state and federal labor departments.
Yet, Jim Brannon, vice president of professional services and human resources at Atlantic General Hospital, gave business owners a cautionary warning.
“I am the first one to tell you that [human resources] is about money, not about people,” Brannon said. “But you lose good people, and it costs you money. So whenever you have to make a change because of this law, just be very conscious of the fact that we are impacting people’s lives because of this. How we go about it may mean the difference between whether that person sticks with us or not.”