After Dec. 1, employees across the country will be obligated to time paid for time worked.

Staffers from the Small Business Administration toured the state this week to prepare small businesses for the rollout of the new federal overtime regulation. The regulation raises the salary threshold for those who are obligated to receive overtime pay. The current threshold sits at $455 a week, or $23,660 a year. After Dec. 1, employees making up to $913 a week, or $47,476 a year, will receive overtime pay for time worked past 40 hours a week.

Small Business Administration regional advocate John Hart and regional administrator Betsy Markey visited Butte, Kalispell and Seeley Lake to discuss the new rule.

The regulation is going to have broad impacts, Hart said, because the threshold hasn’t been updated for nearly 40 years, except for a modest bump in 2004.

“This is a big rule; that means big impacts,” Hart said. “We don’t know what the impact is going to be economically.”

Hart said Montana businesses employ an average of about eight people, one of the lowest averages in the nation. He said the rule will likely affect Montana differently than areas with higher average salaries. He said lower-income industries will see the biggest impact.

“It means the economics are different here than they would be in urban areas,” Hart said. “This will have a broader effect than in Colorado, Utah or other higher-income areas.”

While the new rule aims to protect employees from unfair work conditions, many employers are worried that paying overtime could break their budgets.

“I think it’s going to hurt entrepreneurs working 60 hours a week,” said Russ Hobbs, vice president and treasurer at Great Northern Cycle and Ski. “What do you tell someone? You’ve built a budget to get this business started.”

At the roundtable discussion held at Flathead Valley Community College on Wednesday, Hart and Markey were in place primarily to collect comments and concerns from business owners, rather than offer direct solutions. After their Montana tour, Hart will complete a report to file back with the Small Business Administration relaying those comments to the federal agency ahead of the rollout.

Hart and Markey were able to offer some solutions outlined by the U.S. Labor Department for businesses facing issues with the new rule. The four most basic options given by the department include raising workers’ salaries above the new threshold, simply paying overtime, limiting their workers to 40 hours a week or reorganizing their employees’ work duties to help them work a regular 40-hour week.

What businesses do in order to fall into compliance while not losing production or employees, Hart said, will likely depend on each business’s approach.

“There’s no uniform, standard business model,” Hart said. “Everyone varies.”

Hart did note that the Labor Department doesn’t heavily enforce the new rule or randomly audit companies to check for compliance.

“It’s not proactive. It’s still a complaint-driven system,” he said. “That could come from an employee or a competitor.”

Still, 21 states and a 50-member group of businesses in September filed a lawsuit against the Labor Department, claiming the new regulation is an overreach by Congress.

One unique Montana industry to be affected by the new regulation will be the outdoors industry. The Bob Marshall Wilderness Foundation, for example, pays their employees on an hourly basis. But working projects based on time of year or weather doesn’t produce a consistent work schedule.

Carol Treadwell, executive director for the Bob Marshall Wilderness Foundation, said she’s been researching since August to understand how the new regulation will impact her nonprofit.

“It’s a very well-intended rule,” she said. “It works well with businesses with offices, but in the field it’s very hard to define that.”

Treadwell said the foundation raises funds through grants and fundraisers to work on federal lands. While she wants to pay her employees a fair wage, she said it’s hard to compensate her field employees in compliance with the new rule.

Treadwell hopes to find a better compensation system for her employees with a structure for outfitters and guides, which can be paid on a daily basis. That structure is actually regulated by the state, meaning Treadwell will have to reach out to a different policymaker to make her case.

“I’m just looking for an advocate,” she said.

Hobbs though, from Great Northern Cycle and Ski, said there may be some relief for their shop in the overtime requirement. While one of the Great Northern owners is still below the new salary threshold, he may be exempt from the overtime requirement because he’s an owner. Hobbs said businesses should be able to pay what they can, given that a cycle and ski shop is going to have certain times that requires employees to work more than 40 hours a week, and other times with a more open schedule.

“We have hourly employees that make a good wage,” he said. “This is a case of two people committed to being successful, and their sweat equity is being taken away.”

Reporter Seaborn Larson may be reached at 758-4441 or by email at slarson@dailyinterlake.com.