If you’re an hourly worker, then your employer is required to pay you 1.5 times your regular rate when you work more than 40 hours in a week. The same is not necessarily true for salaried workers.
Current federal rules allow for salaried employees to be exempted from overtime pay if their yearly salary is more than $23,660. You could be working 60 hours a week, but you are currently not entitled to overtime pay if your employer has classified you as an administrative or executive employee and your pay exceeds $23,660 a year.
New rules proposed by the Obama administration and the Department of Labor would more than double that monetary threshold.
If your yearly salary is $50,440 or less, then you would automatically be eligible for overtime pay under the new rules. It is estimated that the rule changes would affect 5 million U.S. workers.
At the earliest, the changes would go into effect in January 2016. Before that, the Obama administration and the DOL must consider input from stakeholders, including employers and the general public. Under the Fair Labor Standards Act, the president is not required to get legislative approval before establishing new labor regulations.
The administration has estimated that about 40 percent of full-time salaried workers will be covered by the new rules.
How will employers respond?
In addition to updating their payroll systems, it is expected that some employers will convert their salaried workers to hourly, reduce hours and hire more part-time workers in order to mitigate labor costs.
Whether you’re an employer or an employee in Texas, you’ll want to be aware of your rights and obligations with regard to wage and hour issues.
Michael Galo, of The Galo Law Firm in San Antonio, helps employees and employers resolve disputes over unpaid overtime. To learn more, please visit the firm’s overview of wage and hour disputes.