Did You Know… The New Overtime Rule Could Affect 10 Million Workers?Admin
The final Overtime Rule is edging closer to its release date while many companies still have no idea it will be released. According to SHRM.com, the new rule may be published by July 7th and take effect on Labor Day. Or the rule could be issued the Friday before Labor Day and take effect November 1st.
Below are a few predicted effects of the new law:
- Wage and Hour Lawsuits will increase.
Companies will need to develop methods to track work time for each employee, even if they are “exempt” from overtime. Companies without tracking systems can expose themselves to wage and hour claims and employee class action lawsuits. This new rule will also skyrocket companies compliance costs.
- Wages may increase.
If an employee is currently paid close to the projected threshold ($50,440 according to SHRM), employers may increase their pay to have the employee not qualify for the overtime rule.
- Employers may have to limit employee hours.
A company which allows their employees who are paid below the new minimum may cut back on hours, so overtime rates will not apply. Managers will need to be trained to be more efficient manager the hours of their teams.
- Hiring may increase.
Under this new rule, employers may have to hire full time or temporary staff to pick up the extra hours if the company limits employees to a 40 hour work week. Hiring temporary staff from staffing agencies may be a good option for companies who will be paying qualifying employee’s overtime to complete temporary projects. If companies decide to pay workers under the new overtime laws, this may have an opposite effect on hiring and could cause a hiring decrease in the company.