New Overtime Pay Regulations For Those Earning Less Than $50K

Under current federal rules, workers who are paid by the hour or earn a salary of less than $23,660 are generally eligible for overtime pay, while those with salaries of at least that amount who work in white-collar jobs generally aren’t eligible.

President Barack Obama issued an executive order to update the regulation last year, with the White House saying that 12% of salaried workers were below the current threshold, compared with 18% in 2004 and 65% in 1975.

The new rule is expected to raise the salary threshold and narrow the white-collar job duties that exempt certain workers from overtime pay.

“Millions of salaried workers have been left without the guarantee of time and a half pay for the extra hours they spend on the job and away from their families,” Labor Secretary Tom Perez said in a blog post.

The left-leaning Economic Policy Institute estimates that between five million and 10 million workers could become newly eligible for overtime pay, depending upon the threshold increase and other rule changes.

Not surprisingly, things will get complicated, with this more aggressive government meddling. NYT notes:

Employers warn the rule could have unanticipated consequences.

Dee Adcock, owner of the W.W. Adcock Inc. pool-supply company in Huntingdon Valley, Pa., said about two dozen of his salaried employees could become eligible for overtime pay if the threshold were doubled. As a result, he may move them to hourly positions that could be subject to seasonal layoffs.

As salaried employees, they often work long weeks during busy summer months but far less during winter. As hourly workers, they would, even though eligible for overtime pay, earn less annually and would “have to jump from job to job rather than have consistent, year-round employment,” Mr. Adcock said.

Supervisors reclassified as hourly employees might not be eligible for paid vacation and performance bonuses and could have less flexibility in setting their hours, employers say.

  -RW