New Overtime Pay Requirements to Include Millions of Workers

Extended overtime pay protections are making their way to millions of workers this year.

In March, President Obama announced the Department of Labor’s update on overtime regulations, which more than doubled the salary workers can make to receive overtime compensation.

By the current standards, workers making less than $23,660 a year, qualify for overtime pay. But starting December 1, that minimum will be more than doubled to $47,476.

Professor Diane Juffras from UNC’s school of government, says the legislation boils down to thing.

“It’s going to bring millions of employees who currently are not eligible for overtime pay into the world of overtime eligible employees,” Juffras said.

Diane Juffras spoke with WCHL’s Aaron Keck. Listen to their full conversation.

 

According to the Department of Labor, over four million new employees will now be compensated for their overtime work.

“So in the short run, that’s going to mean increase cost for employers and increased take home for employees.”

But Juffras warns that there’s more to the regulations than just the salary increase.

“There are more requirements than simply making that minimum, and that’s something a lot of folks forget.”

These requirements are specific to the individual jobs. In order to receive overtime compensation, workers must have job duties that include executive, administrative or professional management. The Department of Labor lists a specific set of criteria that meets these demands, in addition to the new salary requirement.

Juffras says these restrictions may prevent some employees from qualifying for overtime compensation.

“Every organization has a whole span of kinds of employees. Some of them will make the minimum salary but won’t perform jobs that will meet that criteria. Others will be doing jobs that meet that criteria but don’t make that minimum salary.”

Juffras says this will be true in lower wage areas in the state and small local governments. Those small governments, in fact, will be the first organizations to incorporate this new pay system.

“They are really in a pickle because their fiscal year starts on July first, unlike that of most businesses which is January first and the Federal Government which is October first. So they’re really in a scramble now.”

That scramble includes training employees how to properly log their hours.

“They’re not going to be used to putting down what time they come to work and what time they leave and what kind of hours count as work time.”

Juffras says the best way to navigate the changes is to be informed.

“People really need to have a plan. They really need to talk to their employees and have them understand what’s happening – that the employers have no choice. Some employees will be happy and some will not.”

More information on the legislation and the salary guidelines can be found on the Department of Labor’s website.