New Overtime Rule Goes Into Effect Next Week
In May, President Obama and Secretary of Labor Thomas Perez signed the final rule to update overtime regulations and extend overtime pay protections for more than 4 million workers as the Fair Labor Standards Act.
Even after 21 states sued the U.S. Department of Labor in September, the rule is set to take effect next Thursday, Dec. 1.
The act changes the threshold for overtime pay to $47,476. This means that salaried workers who make less than that are eligible for overtime pay after working 40 hours a week, Fox 8 reported.
Currently, the threshold is $23,660, and those workers aren't entitled to overtime pay even if they work more than the 40 hour work week.
According to the Department of Labor, a salaried worker is exempt from this overtime rule by making more than $913 per week; and primarily perform executive, administrative or professional duties.
Because of this new rule, companies should be ready for higher payroll costs either by shelling out overtime payments or increasing salaries to put employees over the threshold.
The threshold will update every three years. According to current projections, it will reach $51,000 by 2020.