How will the new overtime rule affect U.S. workers?

An honest day’s pay for an honest day’s work. This basic premise is addressed in the Fair Labor Standards Act of 1938 which outlines rules for how employers must compensate workers. While the FLSA provides clear guidelines with regard to overtime laws, today millions of U.S. workers routinely work hours for which they are not compensated.

For employees who are classified as nonexempt, a 40-hour work week limit applies. This means that an employer is legally required to pay an employee one-and-a-half times his or her hourly wage for any time worked in excess of 40 hours per week.

Previous Overtime Rule

The previous Department of Labor rule stated that employees who earn less than $23,660 annually or $455 per week must be classified as nonexempt and therefore eligible for overtime pay.

In an attempt to boost wages for lower and middle-class Americans and uphold the basic principles upon which the FLSA is based, the DOL recently made changes to U.S. overtime laws.

New Overtime Rule

Effective Dec. 1, 2016, the nonexemption amount will increase to include workers who earn less than $47,476 per year or $913 per week. The rule change means that more than 370,000 Texas workers and 4.2 million workers throughout the U.S. will be eligible for overtime pay. Over the course of a decade, the rule change is expected to “boost wages for workers by $12 billion.”

What Employees Need to Know

There are several steps that employers can take to ensure that they are compliant with the new overtime rule including raising the salaries of employees who were covered under the previous exemption rule or reprioritizing workloads so that these employees no longer work more than 40 hours per week.

If your employer fails to take steps to comply with the new overtime law, it’s important to know your rights. An attorney who handles employment law and overtime and wage theft claims can assist in recovering wages to which you are entitled.