The Obama Administration has proposed new rule changes in the present overtime policy that will extend to millions of workers.
The present overtime policy is only available for workers earning less than $23,660 annually. The Department of Labor is proposing to increase the threshold from $23,660 to $50,440. This would mean that if your salary is below $50,440 per year, you will automatically be liable for overtime compensation under the new proposed policy.
One of these four changes could occur if you are liable for the new policy:
1. You'll start getting overtime.
At present, personnel who make a little more than $23,660 and are given some executive responsibilities are considered as "exempt" from overtime pay. In the proposed policy, low paid managerial staffs would be reclassified as "non-exempt," meaning if they worked more than 40 hours a week they will be compensated with overtime pay.
2. You'll get a small raise.
If you belong under the new proposed threshold, your employer may just decide to give you a raise in your annual pay by a few thousand, to avoid paying overtime compensations.
3. No more pay, but your hours could be limited.
If you work for long hours regularly but don't get paid overtime because you are an exempt in the present overtime policy, but is considered as non-exempt to the new imposed threshold, your boss would prefer to send you home after eight hours of shift to avoid paying overtime.
These will open up employment for part-timers because the company you're working for would prefer hiring part-timers than paying overtime to full-time employees.
4. You could see no change in hours or pay.
Employers will always find a way to outsmart policies that may affect their possible revenue.
Companies can cut the hourly wage of their employees. For example, if a manager is working 50 hours and is earning $40,000 a year, making the manager a non-exempt in the new policy, employers can cut the hourly pay to maintain paying the manager $40,000 even with the overtime pay.
