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All You Need To Know About The New Overtime Rule

Posted by on Oct 17, 2016

Before the end of the year, a new ruling on overtime pay will take effect. As published in the website of Williams Kherher, the new ruling will expand eligibility to workers with higher salaries thus increasing wage protection for many employees. Released by the Department of Labor, the new ruling will be implemented by December 2016. The new rule increased the white collar exemption threshold of the Fair Labor Standards Act.

Signed into law by President Barack Obama, the new regulations will increase the salary threshold from $445 weekly to $913 weekly. This requires businesses to start monitoring the house of exempted employees whose earnings are below the $913 weekly limit. The new rule by the Department of Labor is based on the fact that the number of workers who are working extended hours without being paid is increasing. The new law was signed by Obama last March 2014.

The last time the white collar exemption level was increased was in 1975. Currently, the current salary threshold of $23,000 yearly is below the poverty line. In 1975, the amount placed a worker at the upper 38 percent of the workforce. In 2015, the poverty level for a family of four was $24,008 per year. One advantage of the new rule is that it will improve company behavior by acting as a detriment to larger companies to cut corners in paying overtime wage to employees.

However, the new rule will also convert salaried workers to hourly thus losing certain benefits and prestige. In addition, it will result to lesser flexibility for the employees to work extended hours. It will also restrict the use of email or work-related phone calls after working hours.

Whether or not the new rule will have a positive or negative effect on employees will be known once it takes effect before the end of the year.

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