Changes in Federal Overtime Laws Set to Impact Paychecks by 2016 

Thousands of salaried employees become eligible for overtime pay

A recent proposal by the Department of Labor and President Obama may have a large impact on the paychecks of thousands of salaried employees throughout the state of New York. Under the new guidelines, certain salaried employees who work more than 40 hours each week will be eligible for overtime pay.

According to the Department of Labor, salaried employees who earn more than $23,660 a year are not currently eligible for overtime pay. The proposed changes to overtime laws will raise that income threshold to $50,440 a year. This means that any salaried employee who earns less than the $50,440 yearly will become eligible for overtime pay.

What impact will the proposed change have on employees?

The impact the changes will have is not yet clear. According to CNN Money, the changes will impact workers in one of four ways, including:

• Payment of overtime wages: Salaried employees with managerial duties who were once considered exempt from overtime pay may now become eligible for added compensation for hours worked over 40 each week, providing that their yearly salary falls below the $50,400 threshold.

• Increased base salary: Some employers may raise the base pay of employees to avoid having to pay overtime wages. By raising employee salaries to exceed the $50,400 threshold, employers may reduce the financial impact overtime hours have on the organization while offering employees increased income.

• Limited overtime hours: Many salaried employees are likely to see a reduction in the hours they are asked to work each week. By limiting the overtime hours worked by employees, the organization is able to minimize the financial costs of the change.

• Reduced base salary: In an effort to offset the costs of overtime, some employers may reduce the base pay offered to employees. This means that employees may still be asked to work overtime hours without seeing an increase in pay.

Due to the wide variety of potential outcomes, many financial experts are wary to weigh in on the impact the change will have on employee salaries and the economy as a whole.

Initial reactions have ranged from excitement to trepidation, however, as some experts believe the changes will make it more difficult for young individuals to enter the workforce. Others believe the increased costs of overtime will be passed on to the consumer. Still others see the change as a step in the right direction.

Have you encountered an overtime wage dispute?

The proposed changes have added increased confusion to an already complex set of guidelines. Far too many employees are denied payment for overtime wages that they are eligible to – the changes may add fuel to the growing fire of underpaid workers.

At Hepworth Gershbaum & Roth, our New York employment law attorneys offer support to employees who have been denied payment for overtime hours. With more than 70 years of experience and a thorough knowledge of current state and federal overtime laws, we have what it takes to help employees recover the compensation they are due. 

To schedule a free initial consultation to discuss your overtime wage concerns with one of our New York employment attorneys, contact us online or call 212-545-1199 today.