The rule, slated to be formally released Wednesday, would essentially double the threshold at which executive, administrative and professional employees are exempt from overtime pay to $47,476 from the current $23,660.
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The updates will impact 4.2 million Americans and close 56-percent of those workers are women, which translates into 2.4 million women either gaining overtime protections or getting a raise to the new threshold as a result of the rule.
The action increases the pay threshold below which employees must be paid overtime wages after working 40 hours a week.
She added she expects the new federal rules to affect almost all companies.
That means less freedom for workers to set their own schedules, she said. Overtime pay hasn’t gotten as much attention as nationwide efforts to increase the minimum wage, but it could have a broad impact. The rules state that when someone’s duties at work are such that they’re not bona fide exempt workers, they should be covered by OT.
The rule also permits bonuses and incentive payments to count toward up to 10% of the new salary level. Thirty of the 43 employees at the Calabasas, California-based company will be affected by the new regulations.
Only seven percent of Americans qualify for overtime under the old threshold, the White House said, compared with 60 percent of workers in 1975 who could earn overtime benefits – usually a 50 percent premium on their hourly wages.
“There are severe repercussions associated with this for both employers and employees”, said Lizzy Simmons, senior director for government relations at the National Retail Federation. Under Department of Labor guidelines, the answer to the question depends on the facts and circumstances of each employee’s work situation.
Q: I’m a manager at a fast-food restaurant and frequently work 50 or 60 hours a week. The previous threshold was $23,660 per year. “However, the threshold for exempt employees in the final regulations is still too high”.
The White House claims the rule change is a win-win for workers that will cause employers to react in one of three ways (see video below): either they will choose to pay overtime rates, give managers a raise so that they make $47,500 or more to avoid paying overtime or reduce the number of hours an employee works.
Analysts say that erosion has contributed to the stagnation of wages for lower- and middle-class workers nationally, and the shrinking of the middle class. “Some will get more time with their family … and everybody will receive clarity on where they stand, so that they can stand up for their rights”.
As noted above, employers will be required to comply with the new rule by December 1, 2016.
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Paul Porter, a truck driver from Ava, Missouri, who is a member of the Teamsters union and a supporter of Trump, said he already received time and a half after eight hours of work but strongly favored the new overtime regulation. Andrew Volin, a lawyer in Denver who represents employers, said current work habits could make it hard. She might have to cut their base pay so they make the same amount as they do now, including overtime. “This is extremely frustrating for me”.
