Thanks to new Labor Department rules, 4.2 million more Americans can soon expect a bump in pay – or some additional free time.
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“The threshold for people who can benefit from overtime was very low before this move was taken and many people who we work with actually – because they were salaried but making below the threshold – they were actually making less than minimum wage”, said NJ Citizen Action Associate Director Dena Mottola Jaborska.
Houston based attorney Steve Roppolo says he’s been busy helping his clients prepare.
The Obama Administration is giving millions of Americans the opportunity to qualify for overtime pay for the first time.
The NRF predicts most employers will cut their employees off at 40 hours before paying them overtime. But they can also raise an employee’s salary to the new threshold to avoid shelling out overtime. Many salaried workers will be converted to hourly, and so they’ll lose certain benefits and prestige, and may view the shift as a demotion. As per law, overtime pay must be 1 1/2 times a worker’s regular salary when the 40 hours a week norm is crossed. Or to stay late on a Thursday if they wanted to leave early on a Friday. “It’s irrational to lower the salary of your most trusted employees”. “It’s one of the most important steps we’re taking to help grow middle-class wages”, President Barack Obama said in a statement. “This is an opportunity the federal government has taken under the Fair Labor Standards Act to ensure people who are working overtime are being paid fairly”. “More than a third of all now exempt women workers, and almost half of now exempt Black and Hispanic women workers, would be covered”.
According to Labor Secretary Thomas Perez, the change is happening because the amount of people receiving overtime has fallen to 7 percent from 62 percent in 1975.
These changes become effective December 1, 2016.
“If you work eight hours a day, you should get eight hours pay”. Or, if employers don’t want to raise wages, they can let them go home after 40 hours and see their families or train for new jobs.
The new rules have raised the annual salary bar at which companies can deny overtime pay to almost $47,500 from the present $23,660, throwing open the opportunity for more workers to earn overtime pay.
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Flexibility is generally particularly important to women in the workforce so the overtime rules will disproportionately affect women.
