President Obama Makes Announcement on Proposed Overtime Rules

On June 30th, 2015, the Division of Labor announced an update on overtime changes that would extend overtime pay to nearly 5 million white collar workers. The Wage and Hour Division (WHD) developed a proposal that would raise the salary threshold for a family of four to a level of $970 per week ($50,440 annually) from the current salary threshold of $455 per week ($23,660 annually). This new proposal would guarantee overtime pay to most salaried workers earning less than the estimated $50,440 next year, meaning that employers should start planning for significant increases in the number of their employees who will be eligible for overtime compensation.

DOL-Overtime-Regs

Although the proposed rule still needs to pass through the rule making procedure, it is intended to bring comfort and clarity for millions of workers who will be able to receive overtime pay. Published in the Huffington Post on June 29th, President Obama says that this change is “good for workers who want fair pay, and it’s good for business owners who are already paying their employees what they deserve”. However, many business owners are concerned. Many argue that the implementation of this new rule will cost millions of dollars for companies nationwide, and could be devastating for small and local businesses. Because of this, many companies may have to decrease the number of management positions they offer, which would therefore minimize career advancements for many.

Are you wondering how this could potentially affect your business? Any questions or concerns, give HR Synergy a call.