If you’re a salaried employee – say, an exempt executive or you’re a manager at a retail, restaurant/fast food chain, hotel or a bank, an exempt administrative or professional employee – who has earned about $455 a week or around $23,660 a year – this will greatly affect you and up to 15 million other salaried workers across America next year.
For 2016, this wage threshold is proposed to be bumped up to $970/week which is about $50,400 a year or less. This is only the second increase in the Exempt worker wage threshold since 1975.
Will I still be considered an exempt employee?
Well, you may definitely be converted from an exempt to a nonexempt employee, going from salary to hourly. This may also mean that you may have to give up some benefits. Bonuses may not be given out as much or policies may change in regards to taking paid vacations. Many employers are expected to convert Exempt worker to hourly (non-exempt) in order to save on the $970/week mandate. If this happens to you, a fair hourly wage will be determined and overtime (time and 1/2) paid when you exceed 40 hours in a 7 day work-week.
What brought on such changes?
President Obama has observed that middle class Americans nationwide are working long days for less due to the outdated rules on overtime pay. As you’re nodding your head to this, so has the Dept. of Labor (DOL). Together, they have proposed this new plan that will increase wages paid to workers by 1.2 billion dollars next year.
What may be some possible cons?
Many entry-level managerial positions may fade away due to these changes. Some employers may insist their employees to put in only 40 hours a week and nothing more.
The National Retail Federation (NRF) has already made it known that if this proposal goes into effect, employers will not pay overtime. They have calculated that the new proposal will cost them millions of dollars. Instead, they will:
- Lower hourly wages
- Hire more part time employees
- Reduce employees working hours
This may bring down worker morale. However, President Obama and the DOL would like to hear from the public before the DOL stamps the final rule on Overtime Pay and places it into effect in 2016. Comment @ FederalRegister.gov before September 04, 2015 to let your opinions be known.
Until Next Time, Be Audit-Secure!
Lisa SmithLog in or Register to save this content for later.