Middle class
workers, rejoice! An overhaul on
overtime regulations is on the horizon with the Department of Labor now
finalizing its recommendations for the amended overtime rules. The finalization is based on the previous
2014 Presidential Memorandum signed President Obama, which was then followed by
the proper federal rulemaking procedures i.e. the Notice of Proposed Rulemaking
in July, 2015 and a 60-day comment period elapsing this fall.
Presently, under the current rules
for overtime (last restructured in 2004) certain salaried workers cannot
qualify for overtime work if they are making over $23,600 a year (a mere $455 a
week). However, with the new rules the
threshold will rise to $50,440. Meaning,
over an estimated five million workers in the United States will now be able to
receive overtime benefits (according to the Department of Labor and the Obama
administration).
Pew Research Center has conducted an
analysis of the jobs most likely to benefit from the new overtime rule that
allows these white-collar workers to become eligible for overtime. At the top of the list “First-line managers
of retail sales workers,” with a staggering 325,783 estimated number of
affected workers. Following this
category: accountants and auditors, Managers (all other), First-line managers
of office and administrative support workers, etc. See
http://www.pewresearch.org/fact-tank/2015/08/24/proposal-could-make-nearly-5-million-workers-newly-eligible-for-overtime/.
To exemplify this, take for instance
a man named Rick. Rick is an employee of
a local restaurant chain. Rick worked
his way up the restaurant management food-chain, starting at as a dishwasher
and is now a shift manager, in charge of 50 employees. Rick works hard to pay for his college loans,
his mortgage, and to put clothes and food on the table for his wife and three
children. Making $460 a week, a measly
$23,920 a year, Rick needs to keep his job even if this means staying longer
hours to fulfill his managerial responsibilities. Yet all those long hours do not amount to any
extra overtime pay because Rick is considered an exempt employee under the
current threshold. Therefore, Rick, like
many middle class workers in the same situation, are stuck working long hours
for wages that don’t provide nearly enough to support a decent lifestyle.
With the threshold change now being
raised to $50,440, a threshold that hasn’t been as high since 1975, those
workers (like Rick) falling below this amount will now qualify for overtime
pay. Employers can no longer exempt
employees from overtime benefits that make over the $23, 600 threshold merely
because these salaried workers are considered “management” or “administrative
personnel.”
But of course change does not come
without backlash. Those in opposition,
such as congressional Republicans and business groups, worry the potential side
effects this proposal could prove to hurt the workforce more than help. These groups argue employers (especially
small businesses) will now give less hours to avoid giving paid overtime to
workers by spreading the work out in such a way to avoid employees from being
non-exempt from overtime benefits. For
example, hiring more part-time workers and cutting down the availability to
earn managerial jobs might be a way for employers to avoid the extra costs.
Keep in mind that the proposed rules
are not official yet, meaning employers have time to reevaluate how to comply
with these standards and should seek legal help in making sure they do. This drastic rule could potentially leave a
lasting legacy for the Obama administration, whether that leaves distaste in
employer’s mouths or not.
For more on this, visit http://www.dol.gov/featured/overtime/#
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