Employment expert explains the recent DOL decision
The U.S. Department of Labor’s recent decision on overtime extends to 1.3 million U.S. workers. The number is much lower than what the Obama administration tried to accomplish during President Obama’s tenure in office.
“Since 2016 when President Obama signed an overtime law which made employees who earned less than $47,000 a year eligible for compensation, many small business owners were fearful that they would not be able to keep pace with new requirements for overtime compensation. When a Texas judge blocked that ruling, it offered a small reprieve until President Trump took office,” says Rob Wilson, President of Employco USA and employment compensation expert.
In the following years, both Republicans and Democrats have struggled to agree on an overtime solution, until revealing their new decision last week.
Previously, workers were automatically entitled to overtime pay only if they earned $23,660 or less a year, says Wilson. But, starting on Jan. 1, 2020, that salary ceiling will be raised to $35,568.
“Under this new ruling, workers are entitled to receive one and one-half times their regular pay if they work more than 40 hours in a week,” says Wilson.
But it is not just workers who earn under the $35,568 threshold who will be eligible for overtime.
“If a worker earns more than $35,568, but their duties are not managerial, they may still be eligible for overtime,” says Wilson. “That is why it is so important for employers to become educated about the regulations in their specific industry and in their state. An employment solutions firm like Employco can be invaluable in helping employers to demystify these evolving overtime requirements.”
For more on this topic, please contact Rob Wilson at rwilson@thewilsoncompanies.com.