Executive Order Will Expand Overtime Rules;
Business Groups Challenging New Updates
By issuing a Presidential Memorandum on March 13, President Obama began the process of updating the Fair Labor Standards Act’s overtime rules to "increase dramatically the number of employees who are paid extra for overtime work.” The "white collar exemptions" for salaried executive, administrative, professional and computer positions will be addressed. How could that affect your company? PHCC is monitoring the changes to come so that you can be prepared for the enactment of new rules.
Update on Overtime Rules
Currently, workers who are paid hourly wages or who earn below a certain salary are generally protected by overtime regulations, while those above the threshold who perform executive, professional or administrative duties are not. The federal rule originally designed to limit overtime for highly paid employees now covers workers earning as little as $23,000 a year, making it possible that those salaried workers are paid less than the minimum wage. An early proposal suggests requiring overtime pay for any worker – salaried or hourly – making less than $50,440 annually.
Some business groups already are voicing concerns, saying this would have a severe impact on the economy. Employers, they believe, would respond to this new mandate by limiting the hours of existing workers to avoid paying overtime, and filling those needs instead with contractors or temporary workers. It also could force businesses to raise prices, hindering consumer spending and the economy.
PHCC will continue to keep an eye on how changes to the overtime rules could impact your business. In the meantime, stay tuned to updates on the U.S. Dept of Labor’s website.