“By 2016, millions of employees around the country could become newly eligible for overtime pay due to a change in federal rules.”

Change in laws seems sweeter when you receive benefits from them. Who doesn't love to get paid for his/her overtime work? I know, everybody does.

The Obama administration has brought some changes regarding overtime rules.

Find out the ways the new overtime rules affect your paycheck:

  • Employees earning an annual salary of $50,440 or less are automatically eligible for overtime pay. According to the federal rules, workers earning a bit more than $23,660 yearly doesn’t automatically qualify for overtime pay.
  • You may get a small raise. As per Tammy McCutchen (a management-side lawyer with firm Littler Mendelson), if you fall under the new salary limit, then your employer may raise your base pay by a few thousand dollars to avoid paying you for overtime.
  • If you are an exempt employee, then you won’t get paid for working extra hours. It doesn’t matter for how long an exempt employee works. He/she is only expected to complete the work given to him/her. Unlike non-exempt employees, exempt employees aren’t paid extra for working more than 40 hours per week. Your employer would love to send you home early than pay you extra. Your boss has the freedom to hire a part-time worker to work that extra hours on your behalf.
  • You may not get the payment for working extra hours. Well, you are eligible for overtime pay. But, you don’t get a single dollar more for working long hours. Why is it so? This is because your employer has lowered your base hourly pay to avoid paying you for overtime.

“In a conference call with reporters Tuesday, Labor Secretary Thomas Perez said the new rules could add as much as $1.3 billion nationwide to workers’ pockets.”

Are you eligible for overtime payment?

  • According to the federal law, hourly employees are eligible for overtime if they work more than 40 hours in a workweek.
  • Employees earning an annual salary of $23,660 or less is fit for overtime pay if they work more than 40 hours in a week.
  • Executive, administrative or professional employees are not suited for overtime pay.
  • Employees who perform mostly executive, administrative or professional duties are excluded from overtime pay. Employers perform a “duties test” for the workers who draw a salary of more than $23,660 annually. This test assesses whether or not a worker mostly performs white collar jobs such as executive, administrative or professional duties. If so, then the employee is not eligible for overtime pay.

According to Christine Owens (director of the National Employment Law Project), “the rule could be adopted by the end of the year, for implementation by January 2016.”

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