WASHINGTON, D.C. — Under a new federal overtime law signed in by President Barack Obama, millions of Americans could potentially see a pay increase after the ceiling for overtime exemptions is raised.
After Dec. 1, 2016, most hourly workers making less than $47,476 a year could be eligible for overtime pay if they work more than 40 hours per week. The increase effectively doubles the old standard of $23,660 last raised in 2004.
According to the administration, the increase was necessary given the toll inflation and other economic factors have had on the average worker. According to reports, only 7% of workers in the U.S. today qualify for overtime based on their salaries, a dramatic decrease from 62% in 1975.
The law is expected to affect 4.2 million employees across the country, including 2.2 million restaurant and retail workers, which amounts to almost two-thirds in that industry. Of those 2.2 million, over 100,000 could expect a raise of $1,500 to qualify for an overtime exemption. Overall, an estimated 35% of salaried employees are now expected to have their wages eligible for overtime under the expansion.
Pros and Cons of New Overtime Wage Laws
The administration expects this number to be updated every three years based on the salary growth from the lowest income areas of the country.
Other effects of the new law mean hourly workers close to the new threshold could see a raise to keep them from qualifying from overtime, while others may remain at their current salaries but would not have to work more than 40 hours per week which would give them time to spend with family.
However, some of the drawbacks may include salaried workers being reclassified as hourly workers and seeing their hours reduced to below 40 hours to prevent overtime wage payments.
Some economists even speculate the new overtime wage laws could force layoffs of salaried employees and see them replaced with lower paying hourly positions to make up for the change.
Find out if You are Being Paid Your Fair wages
Call (855) 754-2795 or complete the Free Unpaid Overtime Case Review form on the top right of this page if you feel that you and and other employees believe that your wage rights are being violated under the FLSA. Our top-rated team of unpaid wage lawyers will evaluate your situation to determine your best course of action to help you seek justice.
Our office will also determine if it is in your best interest to file a lawsuit against your employer. Because strict time limitations apply for filing these types of claims, we advise you contact our experienced unpaid overtime wage attorneys at your earliest convenience and preserve your legal rights.