Overtime expansion may be dilemma for small businesses

By: CBS
By: CBS

Los Angeles, CA (CBS) - President Barack Obama last week called for new rules on overtime pay, saying too many workers are working too many hours without compensation. The move appears aimed at larger corporations. Since the peak of the recession in 2009, profits have doubled for companies listed on the S&P 500, while wages have stagnated.

But the real battleground may involve small businesses, where the impact is getting personal.

Levon Bedrossian is a manager at the Burbank Athletic Club. He makes about $36,000 a year, with no overtime pay and says he works about 60 hours a week.

All those extra hours with no overtime pay.

"Anything that needs to be done here, I'll do it -- no matter what it is, even if it means cleaning a toilet," he says.
Bedrossian says he doesn't feel that he gets the value back for all the time he puts in at work.

Currently under federal law, employees like Bedrossian who are considered executive, administrative and professional can be denied overtime if they are paid more than $455 a week, or just under $24,000 a year. The president will raise that threshold to anywhere between $550 and $970, CBS News chief White House correspondent Major Garrett reports.

If Bedrossian were paid overtime, it would add $27,000 to his annual salary. He says the extra money would make "quite a big impact" on his life.

While the club's owner acknowledges his managers deserve more compensation, he says he's still struggling to keep his company afloat after the recession.
"I refuse to fail; I'm finding a way," he says. "Yes, I'm getting more out of my staff. Yes, I'm getting more out of my employees. Yes, I'm getting more out of my managers."

Since one of those managers happens to be his brother, Greg Bedrossian says he's well aware of the strain on his employees.

"Can I afford to pay them more? I can't afford to," Greg Bedrossian says. "If changes in the laws and changes in the rules are going to break the back of a business owner to where they're going to possibly shut down their business, then it's a mistake. Because then that manager that you're trying to help, he's out of a job anyway."

Levon Bedrossian says he's able to see the other side of the argument.

"The company won't grow unless there's revenue being made," he says, adding he'd be willing to forego the overtime if it means he'd keep his job.

It's a dilemma where the payoff is still unclear.

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