4.2 million American workers will either gain new overtime protections or get a raise to the new salary threshold. That's according to the Department of Labor.
Claire Davis is digging deeper into the new overtime rule and what it means for you.
Right now, if a worker earns a salary of more than $23,660 a year they're exempt from earning overtime. If they earn less than that, they can be paid time and a half for every hour over 40 in a week.
The big change is that threshold for an exempt employee is moving to $47,476 a year. That means if you earn less than that, you will be eligible for overtime pay if you work more than 40 hours a week. That change is coming December 1, 2016.
Cesare Mammarella owns four restaurants in Macon. “Bearfoot Tavern, Brasserie Circa, Tic Toc Room, Ginger,” said Mammarella. He's been in the business a long time. “Since I was about 14,” said Mammarella.
The U.S. Department of Labor's new overtime rule is shaking things up for him and his employees. “Some will be getting some raises. That will be putting them probably right over that amount. The other is we've kind of renegotiated an hourly rate to put them right where they need to be as far as their previous salary,” said Mammarella.
Mammarella says the new regulations are challenging for small businesses like his. “Whether it's payroll, whether it's standards, whether it's the health department. Most of them sometimes being unrealistic, but at the end of the day we have to do what we have to do and we change and we mold into what it is,” said Mammarella.
Certified Financial Planner Sherri Goss says employers have choices to make. “Every employer is going to have to measure their staff and see what should they do, what is the smartest thing for them to do to manage this,” she said. “Increase your salary over the exempt amount so that you can't get paid overtime pay. They could move people to hourly instead of salaried. And then authorize overtime pay or they could leave people as they are,” said Goss.
Goss says the folks who will be most impacted, “Manager and Assistant manager jobs who work in the retail and service sector,” said Goss.
That's where we find Pin Strikes Kitchen Manager Shane Woodall. “Right around $30,000 a year and I work right at 40 hours a week,” said Woodall.
Woodall says his company has already made changes to accommodate the new rule. “They already pay me overtime every hour over 40 hours, I get paid. So for me, it wouldn't change, but I have been in salaried positions before where I worked, you know, 50-60 hours in a week’s time, but I was still getting paid the same thing on a regular basis,” said Woodall.
Even though that's the case, Woodall says the new rule will ensure that continues to happen. “It would probably give people more of an incentive to come to work, do their job better,” said Woodall.
A 2014 mandate from President Obama requires the federal Department of Labor to regulate the new rule. The rule will take effect December 1st. For more information on the overtime rule, visit the Department of Labor’s website.