The new overtime rule, designed to put more money in the hands of the middle class, could be considered the most under-appreciated action of the Obama presidency. The Department of Labor officially issued the new rule, which has been under fierce negotiations for several years. Going into effect on December 1, 2016, it will raise the overtime pay threshold to $47,476 annually, which means that if you are a hiring manager you have great news to share with your team. Although good business culture and an endearing management style are great team motivators, an increase in pay nearly always catches the attention of your team. The added benefit of overtime pay will help many employees to pay off debts.
Just a generation ago, overtime pay was the standard for American households. Unfortunately, that threshold had been allowed to set at $23,660 for more than a decade placing it out of grasp for the majority of the middle class. The Economic Policy Institute states that more than 12 million employees across the U.S. will now be eligible for overtime thanks to the rule change.
If you or your team fall within the lower middle class American salary, they can not be declared as managerial "salaried" staff. In times past businesses could give them this designation and pass of large sums of hours at no additional pay since the manager position was salaried. No matter how companies try to get around this rule, they will find limited options. Millions and millions of workers will now qualify for overtime pay, which is significant for most. Now is the time to start tracking your own hours, and you may have to look up an employment lawyer.
The new rule is designed to help people, and with that being emphasized, it will put millions back into the hands of the middle class. While all middle class workers will be impacted, this demographic includes a disproportionate number of females, Latinos and blacks. Since the rule was just sent out to businesses across the country, now is the time to start getting ready for the big switch on December 1.