New DoL proposal may impact employee overtime

CNN Money recently reported on proposed rules from the Department of Labor (DoL) that could affect who is and isn’t eligible for overtime payment. According to the source, the new regulations would likely raise the threshold for workers that are eligible for time-and-a-half payments above the current cutoff of $23,660. For HR professionals, this may mean tracking a significant adjustment to the number of workers who receive this extra payment.

As the article describes, there won’t be one net effect: all companies will react differently. Some employers may reduce base payment rates to make up for the new overtime standards, while others grant their workers a minor raise instead of the overtime itself. Another consequence could be slightly shorter work hours in companies that decide to simply negate the need for employees to stay late at all.

In a piece for the Credit Union Times, employment law expert Robert Gregg speculated on the ways that businesses might have to respond to the DoL’s alterations, since even small changes to wage laws could be significant for managers.

“If the Department of Labor raises that threshold astronomically, it may mean that a lot of companies may have to start paying overtime to current managers for the same amount of work that they’re used to getting,” he said. “What’s coming down the road could throw a lot of the current practices out and make people rethink and reconfigure their staff profiles,” he added later in the piece, after noting that a lot of the rules currently used are old and out of date.

It’s possible that the new conditions specified in this proposal, when it is realized, will require businesses to rethink their current approach to payroll to address changes. Proper HR software implementation will lay the foundation for improvement.

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