What does the new OT rule from DOL mean for workers?

On Behalf of | May 23, 2016 | Employee Rights

New rules just finalized by the Department of Labor hold the promise of there being a little extra in the paychecks of a lot of workers. Many in Texas, Georgia and elsewhere in the country may be of the notion that the new rules only apply to government employees, but that is not the case. Considering that employee rights for federal workers and private sector employees are affected, it seems appropriate to offer this view of the new rule.

To begin with, it is important to note that the new rule is not something that is cookie-cutter-like in its application. The DOL estimates that as many as 4.2 million workers who now are salaried could see a benefit from the rule. But the final number will depend on how employers respond, and they have a number of different options.

In general terms, the new OT rule looks like this. Starting as of Dec. 1 of this year, white-collar workers who earn up to $47, 476 a year could be eligible for any hours worked over 40 hours in a work week. Today, that threshold stands at $23,000.

Notice that we are talking about salaried workers here. Normally we might think of overtime pay going only to those workers who are paid an hourly wage. Under the new rule, exemption from the overtime rule depends on the kinds of duties a salaried worker performs.

Those who have supervisory responsibility over two or more other workers would be ineligible. If you are salaried and fulfill administrative duties that involve managing the employer’s business at a level at which you exercise your own judgment and discretion, you may be exempt.

The new rule offers employers some options on compliance to control costs. They could accept the new rule and begin paying appropriate overtime, but they could also raise a person’s salary over the new threshold level. It’s also possible that employers will prohibit eligible workers from working over 40 hours by ordering part-time workers to fill gaps.

Some analysts say another reaction from employers could be to shift salaried workers to waged workers. How that might affect manager-employee relationships, though, is hard to gauge.