Overtime rule raises the salary threshold for exempt employees getting overtime on work over 40 hrs.


It is not only politicians who hate working people, but statist government bureaucrats and their labor union co-horts (co-whores?) also hate working people.

The Democrat party’s push for an increase in the minimum wage from $7.25 to $15 has overshadowed another employment law that will cost many workers their jobs – or at the very least, cause their salaries and/or hours to be reduced  — and drive many companies into insolvency. It’s a change in the overtime rule mandated by the Department of Labor (DoL) that will raise the salary threshold for exempt employees to receive overtime pay for work beyond 40 hours.

Currently, salaried employees earning $455 per week ($23,660/yr) or less must be paid overtime for any hours they work beyond 40 per week. But beginning in December, the threshold will jumps to $913 per week ($47,476/yr).

DoL predicts that 4.2 million workers will be directly affected and another 8.9 million will be indirectly affected by the change. It estimates that after the change approximately 35 percent of all full-time, salaried workers would be eligible for overtime based on their salaries alone. To comply with the change employers have three options, according to Entrepreneur:

  • Raise non-exempt employee salaries so those people maintain their exempt status.
  • Reclassify hourly employees as salaried employees
  • Reclassify salaried employees as hourly, adjusting their base pay in order to account for overtime.

But there is another likely scenario, one that has already come into play as a result of Obamacare. That is, make employees part time and eliminate their benefits. Employees who have met that fate are now called the “Twenty-niners.” It’s an option many businesses will adopt.

What the DoL is doing, just like with minimum wage laws, is preventing people from entering into mutually beneficial relationships to exchange labor for wages at a rate they on which they agree. It also creates disincentives to work and harms the young and industrious. In short, just like minimum wage laws, the exempt rule is a form of collectivism: the idea that all workers are equal and should be paid the same, regardless of the task they perform.

Many a successful career was built by a young worker willing to work long hours in a salaried position in an effort to catch the eye of upper management and gain needed experience in order to land a better-paying job in a company. Many businesses will prevent workers under the threshold from working overtime at all, which will hinder their career path.

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