New overtime law impacting millions of workers goes into effect Dec. 1

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INDIANAPOLIS, Ind. – A new federal law goes into effect on Dec. 1st that could potentially affect millions of workers across the U.S.

Businesses have been scrambling to prepare for the onset of the Fair Labor Standards Act, which changes the threshold for overtime pay to $47,500. Salaried workers who make less than that are eligible for overtime pay when they work more than 40 hours in a week.

As the rules currently work, companies can avoid paying overtime to full-time salaried employees making as little as $23,660 by classifying them as “exempt.” Those workers aren’t entitled to overtime pay even if they work more than 40 hours a week.

The law that goes into effect on Dec. 1 changes that. The White House said the 40-hour workweek has eroded over the years, with workers putting in more hours without being compensated for them.

What does that mean for companies? They’ll have to anticipate higher payroll costs, either by paying out more in overtime or raising the salaries of employees so they hit the $47,500 threshold to become exempt employees.

Companies could also make changes to paid time off, bonuses and incentive plans to compensate.

In Indiana, the law is expected to affect nearly 250,000 workers.

The salary threshold will be updated every three years. Based on projections, it is expected to rise to $51,000 by January 1, 2020, after the first update.

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5 comments

    • Jessica

      No. Not good. I agreed to work 45 hours/week for my salary. It meant I could work from home while my kids were sleeping and my husband was at work. Now I will have to clock in and out and will no longer be able to work from home. Now I need to pay a babysitter and I will be able to spend even less time with my kids and husband. Also, I am now the highest paid employee so guess who will be the first one who has to go home when labor isn’t good. The government has yet again interfered in my private decisions (not-even-close-to affordable Care act also made my life “better”) The government needs to stop regulating everything and allow people to make the choices that are best for their particular circumstances.

  • Kel

    It didn’t work out for me. I agreed to work 45 hours for my pay about 2 months ago. Now, I am losing a weeks paid vacation and can’t work forty because they fear I will go over in hours. Really stinks. Losing money and time off. Also, I’m not getting straight answers on my paid holidays. Hourly employees have fewer paid holidays.

  • BooBoo2

    I was salaried and required a minimum 47 hour work week. My company has now made me hourly, the hourly rate based upon what was a 47 hour work week. We are now discouraged from working any overtime. My vacation time is now based on the hourly rate at only 40 hours. I have essentially now taken a pay cut thanks to this new law. It’s a win for the company and the government but a loss for me.