Overtime Pay in Regards to the New Rule
Recently, the Obama administration has declared a substantial change in the federal labor law. The publication regards the Department of Labor’s final rule, which modernizes the overtime regulations. Ideally, this change under the federal law is meant to extend overtime pay automatically to millions additional Americans.
Nevertheless, although the new rule for salaried workers’ overtime pay determines the employees, who qualify for the overtime pay when they work for not less than 40 hours every week, sometimes employment disputes may arise. When this takes place, it will be necessary for one to hire a United Employees Law Group Lawyer when they require help with legal guidance.
Here are the explanations and repercussions of the new rule:
First, a business cannot hire an individual with an agreed salary, for instance, $50,000 with the condition that they will work for some unpaid overtime hours, even if the worker agrees. As an illustration, the law does not permit an employer and the staff to decide not to follow the law. Therefore, it does not leave the businesses with any discretion in that regard.
Another point is that an enterprise cannot turn a blind eye to workers who are working overtime. Hence, even if an employee works overtime and does not report those hours since they want to demonstrate that commitment or perceive it to be their interest still the employer will not be off the hook. Consequently, an employer will be liable if they are cognizant that this is going on.
Additionally, the opportunities for the employees who wish to work long hours so as to advance their careers or get a promotion will still be there. Nevertheless, a staff member is not allowed to work overtime and not receive payment.
For all that, there are also some ways for a company to get around this law. For instance, a business can hire fewer employees than they had projected so as to cut down these costs. Another way is that a firm can decrease the number of hours its staff works. Even so, in this law, there are not that many loopholes.
Notably, this law seems like a huge added cost for carrying out a business since they will need to increase salaries or pay more ways in the form of wages. Nonetheless, the point is that it is insubstantial since it is a short-term cost for a company. However, they will increase the purchasing power of each.
Furthermore, many people are for this change because there have been numerous instances regarding the purchasing strength of the workers in America. Also, many retail outlets and manufacturers could work their employees for more than 80 hours, and they were not required to pay them overtime.
Recognizably, some of the jobs, which the change will affect the most, are the food and retail services. To explain, a retail or food manager who used make $30,000 a year and who would be exempt under the current law now will not be exempt. Therefore, food services and retailers will be subject to paying them overtime.
Importantly, this law contains an automatic update after three years. The law was updated for the reason that it wasn’t indexed to inflation. Evidently, more than 60% of employees were covered by the law in the 1970’s. However, more and more of them were moved outside the coverage as inflation increased and salary threshold remained the same.
Encouragingly, this law covers around 4 million workers as far as the Obama’s administration is concerned. Regarding percentage, the figure jumps to 35% under the new law compared to 7% under the current law.
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