New rule for overtime pay affects millions of eligible salaried workers.
Look out salaried employees! You may be getting a boost in your salary for overtime work. New legislation put forth by the Obama Administration seeks to change the way middle-income workers are paid. The plan calls for employees making less than $47,476 per annum to qualify for overtime pay. Itâ's expected that this is new rule will affect nearly 4.2 million employees.
The current rules call for overtime pay if salaried employees make less than $23,660 per year. However, the last time the rule was updated was over ten years ago. The US Labor Department expects that the change will increase total wages by $12 billion dollars in the next decade. Additionally, they hope to increase the salary limit to $51,000 by 2020.
The new law is set to take effect on December 1, 2016, and it will require employers to pay qualifying employees time and a half for any overtime work. According to the Economic Policy Institute, many of the workers that will benefit from the change are young professionals, women, and minorities.
While the new rule is beneficial to middle-class workers who struggle financially, the law has been met with opposition from small business owners, non-profit organizations, and universities. The new law may cause salaried employees to be demoted to hourly employees to accommodate the change in pay. Doing so may mean that employees will then be assigned fewer hours, which would then have no positive effect on their pay. Employers are also concerned that expenses incurred by the new rule may have adverse effects on their employees, customers, or students.
As new laws take effect, ensure that your business is protected with the right insurance. Keep your employees safe with workersâ' compensation insurance. For help finding the right policies,Â
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