Economy
GOING INTO OVERTIME A new overtime rule from the Department of Labor sounds pretty simple—if you work over 40 hours per week and are on a salary of less than $47,476, you are entitled to time-and-ahalf—but in this world of competing employer/employee interests and large profit disparities between small and large businesses, the regulation might have many unintended consequences. Some of those consequences will be great for workers and business alike—while other consequences may result in a quandary worse than the one the rule was supposed to remedy.
by Josh Newby
T
he expanded overtime coverage marks the most significant change to the way time-and-a-half is dispensed since 2004, when amendments were made to the Fair Labor Standards Act (FLSA) that addressed the determination of which employees are exempt from the requirement for minimum wage and overtime pay. Even then, the changes dealt with executive, administrative, professional, creative and sales positions and did not tweak the salary threshold, which had been set in the 70s. It should be noted that, since the 70s, it is estimated that nonfarm productivity has increased nearly 50 percent. Until the new rule takes place, those making under
$23,660 who work over 40 hours a week are entitled to overtime pay, unless you are in a supervisory position of some sort or are in a terminal position, like an attorney. When the new rule is implemented on Dec. 1, 2016, however, that figure increases to $47,476, or $913 a week, and there are no longer exemptions for managerial positions. There are, however, exemptions from registered nurses, hospital employees, some public school teachers and some seasonal hires. “This new change may seem scary, but the Department of Labor has put in a lot of safety nets,” said Amie Remington, an attorney at Landrum Staffing Services. “If you’re not open
12 months a year, for example, and your gross receipts do not exceed $500,000, there are certain workarounds to the regulation.” The average American workweek is 47 hours, so a lot of salaried workers stand to benefit from this change. In fact, the Labor Department estimates that as many as 4.2 million executive, administrative and professional employees who earn above the old threshold but below the new one will be able to receive time-and-a-half for the hours above 40 they work each week. A primary concern of the Labor Department was that many workers were being taken advantage of, sometimes clocking in at 60 hours a week with no additional nwflbusinessclimate.com | Business Climate | 57