The New Overtime Rule: How Are You Affected?

I’ve been a salaried employee for most of my adult career. When you’re salaried, as most of my readers are, you are called to do “extra” projects and tasks that may have taken you past your schedule to complete. Ever taken an important project home with you? I have and it wasn’t fun. All of those “little projects” add up and may lead you to write your resignation letter. Starting December 1st that may all change.

Currently, under the Fair Labor Standards Act the annual salary threshold for overtime is $23,660, however, with the new law just released by The Obama Administration that salary doubles. Now, an annual salary threshold for overtime is (drum roll please) $47,476. This means The Obama Administration has made it possible for around 4 million workers to be eligible for overtime pay.  

Sounds like a dream come true, right? I think so, however, there are some things you must consider before you start celebrating. What’s great for the employee isn’t great for the employer, so expect some cuts.

Why the change? According to the Labor Department “too many Americans have been left working long hours for no additional pay.” We all know this to be true and businesses will not take this new law lying down. The employees gain is their loss, so how will they get around it?

Less hours. Employees of the food, retail, and manufacturers/warehouse industries will be the most affected. Instead of having one manager there may be two part-time managers, or just less hours and a reduction in salary. It will hit most businesses hard with an increase in cost, however, it will ultimately increase purchasing power and overall employee satisfaction, thus showing up in the bottom line. Happy employees make you money!

While some businesses will look for loopholes to cut costs, I do not think it will be the norm. If you are an hourly worker then you’re already eligible for overtime pay regardless of how much you earn. For the millions of salaried employees, this means a step in the right direction to your time being valued.