U.S. Overtime Law Modification May Impact Millions
In May 2016, the Obama administration helped to modify Department of Labor (DoL) regulations in order to extend overtime pay to significantly more U.S. workers. Under the new rule, the salary at which an employee becomes ineligible for overtime is nearly double what it had been previously, expanding the number of employees who may receive overtime pay. This change could bring both good news and bad news in the long-term, for both employers and employees.
Advantages of Overtime Law Modification
Previously, the salary ceiling at which “executive, administrative and professional” employees became exempt from overtime pay was set at $23,660. This May, that figure was slightly more than doubled, rising to $47,476. This change arguably has the power to alter the economic landscape significantly in many states.
The immediate advantages are obvious: more U.S. workers can be paid for their overtime work. It is unfortunately all too common for organizations to not pay workers for time worked beyond their shift. DoL regulations mandating time and a half, however, will help ensure that more workers are paid equitably, potentially cutting down on slipshod bookkeeping and providing safeguards against employers who discriminate.
Potential Issues
Despite the obvious gains, it is also plausible that some employees might actually suffer negative consequences as a result of this change. Some employers, for example, are unwilling or unable to absorb the increased up-front cost of overtime expenses and may cut jobs or change hours in order to adapt to the new mandate. Consequently, some employees may wind up having their pay reduced as employers attempt to offset expected overtime expenditures.
In South Carolina, this problem may present itself in a particularly widespread manner, because as a general rule, the cost of living is lower south of the Mason-Dixon line. Salaries tend to be lower, which means that workers tend to work more hours to try to make more money. If employers cut hours or pay, workers may suffer.
Ask an Employment Lawyer
It may be the case that the DOL’s modification of the overtime rule will have a net positive effect on U.S. workers. Some employers are willing and able to absorb increased overtime costs. But if you have suspicions that you are being treated unfairly on the basis of overtime pay, it is a good idea to consult an employment attorney.
Attorney A. Christopher Potts and his firm of Hitchcock & Potts have made a practice of handling employment law and potential discrimination situations, and are happy to work with you to help you improve your situation. Contact us today to set up a preliminary consultation.