By David Cruz
The new rules affect over 4 million mostly white-collar workers. Announced this week by Vice President Biden, the idea is to put more money in the pockets of middle class workers. But, while most workers advocates say it’s been a long time coming, employers say the new rules represent an unreasonable hardship.
“The industries that are going to be mainly impacted are going to be retail for certain: restaurants, banking, hospitals are going to be heavily impacted, technology companies, mostly startups are going to be heavily impacted and then nonprofits,” noted Christopher Mayer, a labor attorney with McCarter & English.
Right now, the threshold at which these workers are exempt from overtime pay is $23,660. If you make less than that and work more than 40 hours a week, your boss has to pay you overtime. Starting Dec. 1, though, the number goes up to $47,476, increasing the pool of overtime-eligible workers by hundreds of thousands here in New Jersey.
“The threshold for people who can benefit from overtime was very low before this move was taken and many people who we work with actually — because they were salaried but making below the threshold — they were actually making less than minimum wage,” said NJ Citizen Action Associate Director Dena Mottola Jaborska.
Employers will have seven months to figure out what they’ll to do comply. Some might just give their workers a raise to put them over the threshold for overtime but not everyone is willing to just do that. Laurie Ehlbeck’s organization represents small businesses in New Jersey. She says the rules will be especially tough on smaller businesses, where profit margins are tighter.
“We believe our members are going to have a couple tough decisions to make,” she said. “One of them could be to move some of their employees from salaried workers to hourly workers and also it’s going to make them more strict about people not working more than 40 hours. When workers go from being a salaried employee to an hourly worker it’s a little bit demoralizing, plus it gives them less benefits.”
And makes things like telecommuting — working from home, or answering e-mails and doing research after hours — complicated. However employers choose to comply with the rules, some may cap worker hours at 40 and hire more part-time workers, Mayer says the rules will change the employer-employee dynamic.
“If they do become non-exempt, that is they’re eligible for overtime, they’re accustomed to working after hours at home, checking an iPhone after hours. Now they’re going to have to be paid for that time,” added Mayer. “They may telecommute and employers are going to have to decide how are we are going to track the hours, if we’re going to allow this employee to continue to telecommute, are we going to put a stop to telecommuting, saying now you have to be in the office, so these are some of the concerns that are going to come up.”
Like the minimum wage and paid sick leave, the new overtime rules represent — on one side — the Obama administration’s attempt to make policy around Congress and — on the other — a business community trying to keep labor costs down and profits up. And how you feel about probably depends on whether you’re writing the paychecks, or cashing them.