The Obama Administration will announce details Wednesday of a new overtime rule they've slammed into place, and it's set to go into effect by Dec. 1.
According to The Washington Post, employers are currently required to give overtime pay to only 7 percent of salaried employees — those making $23,600 or less a year. But under this new rule, that threshold will change to $47,476, qualifying a total of 35 percent of salaried employees for overtime pay.
The impact of this rule has been likened to Obamacare.
Center of Budget and Policy Priorities senior fellow Jared Bernstein said, “Along with health care reform, this is one of the most important measures that the Obama administration has implemented to help middle-wage workers.”
But while many middle-wage salaried workers may initially praise the idea of getting more money in their pockets, universities, small business owners, and nonprofit groups are warning that the extra cost of paying salaried employees more may have a negative impact on those salaried employees. They warned that in order to afford paying overtime to those employees, they'll have to move some of them to hourly positions and reduce their hours.
National Retail Federation's David French said, “For many of these types of employees they’re going to be viewing it as a demotion. They’re going to have to clock in and clock out. They’re no longer going to have flexibility at work.”
French said the trend of shifting work to part-time workers instead of paying out overtime could increase. And the University of Tennessee's Linda Harig says tuition could increase by 4.3 percent for students in order to pay out more overtime.
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