Under the new rules, millions more workers are expected to be made eligible for time-and-a-half pay when they work more than 40 hours per week.
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The US government is working on introducing reforms that will extend overtime protections to millions of additional workers.
The newly announced overtime rules by the Obama administration have evoked mixed reactions. Some will see more money in their pockets.
In Ohio Wednesday, Vice President Joe Biden promoted the new rules.
Labor Secretary Tom Perez says the change, which will take effect December 1, will qualify 4.2 million more workers for overtime pay. The new rule will create problems for managers, some of them newer hires, who take longer to get their work done, she said. The owner of Village Foods says it won’t effect his businesses at all. Researchers at George Mason University argue employers will cut base salaries to account for the overtime pay. “Is it going to hurt anyone you know maybe as far as your tax returns or things like that, it put you in a different bracket”, ECU employee Colleen Roland said.
The new rules will increase paperwork and scheduling burdens for small companies and force many businesses to convert salaried workers to hourly ones to save money.
Mara Fortin, president and CEO of seven Nothing Bundt Cakes bakeries in San Diego, said she might give raises to her “superstar” managers to lift their pay above the overtime threshold.
Business owners, on the other hand, say it’s bad news for their bottom line.
“The salary threshold – although slightly less than originally proposed – will mean many employees will lose the professional “exempt” status that they have worked hard for and the flexibility from rigid schedules that they care deeply about”, Jackson said.
The rule increases the salary threshold below which most white-collar, salaried workers are entitled to overtime from the current $455 per week (or $23,660 for a full-year worker) to $913 per week (or $47,476 for a full-year worker), according to a Department of Labor media release.
The rule will likely touch almost every sector of the USA economy but is expected to have the greatest impact on nonprofit groups, retail companies, hotels and restaurants, which have many management workers whose salaries are below the new threshold.
“I think that if they were up the threshold, they should take a closer look at the income levels on a local basis as opposed to a national basis”, said Austin Barrett, who works in Harrisburg.
David Teich, president of the Greater New Orleans Hotel & Lodging Association, said it’s too early to say how the rules will affect the industry. How will they count time that an employee spent reading an email after-hours, at home?
“This policy just hasn’t kept up with the times”, Obama said.
So, who are the workers that will benefit most?
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“Do you foresee employers switching people from a salary situation to an hourly situation?” asked 2 On Your Side’s Kelly Dudzik.
