Do the new OT rules hurt? That is the question. The answer is, of course, vague. Let’s look at a few key points. (Here is the full document)
1. A person has to be on hourly wages
2. The salary is at less the $455 a week, or $23,660 a year
3. The person is not classified as administrative, executive, or professional.
Ok, lets look at the salary. The FLSA as of 8/23/04 upped that from $155 a week. So prior to 8/23/04, the person had to have been making LESS then $8060. So amount made to qualify for OT has been significantly increased. How is this a bad thing? Well, it’s not. Consider that the majority of hourly wage earners out there were making well more then the $8060 that was the previous max threshold, yet were getting paid OT. Verrrryyyy Interesting (Paul Lynde voice.)
This doesn’t mean that companies are wringing their hands like Ebeneezer Scrooge, waiting to take that OT pay away if you make more then $455 a week. Most companies will be wise, and leave it there. Consider that many who make hourly wages at this time, such as PC technicians, do not get OT anyhow. They get paid lots of money to start with. Same with those making $100,000 or more. It begs the question “what company is dumb enough to pay someone OT who is making that much anyhow? It works out to $48.08 at straight time, $72.16 at time and a half.
With the classifications, you run into the same thing. Those who can be classified as administrative, executive, or professional will not necessarily have their OT taken away, if they are still hourly workers. Many of them will already be on salary, so it doesn’t effect them anyhow. Some will be effected, certainly. The numbers remain to be seen.
A big part is that the FLSA update doesn’t say that people cannot be paid OT, or HAVE to be reclassified to deny the OT. Reclassifying someone as exempt (not eligible for OT pay) from Non-exempt will not necessarily happen. The updated regulations just sets the minimum. Furthermore, state laws can change how the FLSA effects workers. Consider also that there is no law that says that a private company has to pay workers double time for holiday pay or paid holidays off, nor do companies have to offer vacation pay. But most do.
Do the changes make sense? Mostly. They really haven’t been changed since 1949. Do they favor business over workers? The $455 a week sure benefits the workers. Do other parts of it benefit business? Sure. If they choose to change. Again, there is no law that says that a private company has to pay workers double time for holiday pay or paid holidays off, nor do companies have to offer vacation pay. But most do.
Companies and individuals have had plenty of time to make their opinions know. The Department of Labor held plenty of meetings: “During 2002, the Department of Labor convened a series of stakeholder meetings, and heard suggestions for changes from over 40 interest groups representing employees and employers.â€
The Department of Labor will also have plenty of inspectors out there, and will be looking for complaints about companies taking advantage of the new regulations.
And let’s not forget that the new regs give more OT to First Responders. Who are considered professionals, aren’t they? But they will be considered non-exempt, and eligible for OT.
One nitpicky thing: CNN.com had the headline “The End of OT?†earlier in the day. A totally and completely irresponsible headline, worthy more of a supermarket checkout rag. I am glad they changed that.
