New rule set to expand overtime pay for 5 million Americans

An employment rule change recently announced by President Obama is expected to expand eligibility for overtime pay to about 5 million salaried Americans. Currently, if your yearly salary is more than $23,660 and your employer has classified you as a manager or executive, then you may not be entitled to overtime pay, even if you work much more than 40 hours in a week.

The rule change would bump that pay threshold up to $50,440 for salaried employees, meaning that workers whose salary is less than that amount would be eligible for overtime pay. Note: the law already requires that hourly workers be paid 150 percent of their regular hourly pay rate for every hour over 40 in a given week.

While employees and workers’ rights advocates have praised the president’s decision to expand overtime pay, the rule change still faces significant challenges. The federal Fair Labor Standards Act allows the president to make changes to labor rules without first seeking approval from Congress, but in this case opposition from lawmakers is expected. Employers and business groups also continue to voice their opposition to the rule change.

Some economists predict that employers will respond to the new regulation by cutting workers’ hours and converting salaried workers to hourly. Still, the White House says that 5 million employees are likely to benefit in the short term.

If your employer is not paying you the salary or wages you deserve, then don’t hesitate to explore your legal options. For more on overtime pay and receiving a fair wage, please see Serrins Fisher LLP’s overview of wage and hour laws in New York and on the federal level.

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