A significant move has been made by the Obama administration in connection with paid overtime rules, which could impact as many as 4.2 million Americans, including many in Minnesota. The rules have been changed to expand paid overtime rights to more employees, specifically salaried workers. Hourly workers are already entitled to paid overtime, and this will not change.

Prior to these changes, only salaried workers who earned less than $23,660 annually could receive paid overtime if they worked more than 40 hours in one week. Since the laws have not been updated for a number of years, this means that only about seven percent of salaried workers currently meet this requirement. Under the new rules, starting December 1, that salary limit will more than double to $47,476 annually. This means that salaried workers whose salaries are at or under $47,476 will be paid time-and-a-half if they put in more hours than the standard 40-hour workweek.

Under the old rule there were exceptions to the overtime rule. Managers, executives and a number of other types of employees were not subject to the rule, no matter what their salary was or how long they worked. The new rule changes this, so that these exempt employees may also be eligible for overtime if they fall under the salary requirements listed above.

This new rule gives employers a number of options. They could choose to pay overtime to those workers who qualify for it under the new rule, or they could limit the worker’s hours to 40 hours per week, so that they will not have to pay overtime.

The goal of the new rule is to allow people with middle-class jobs to earn middle-class salaries. While the new rule may be challenged by some, it will be interesting to see how it plays out once it goes into effect. Employees in Minnesota deserve to be paid a fair amount, and this means receiving overtime pay when applicable. An employee rights attorney can provide workers in Minnesota with more information about overtime claims.

Source: The Huffington Post, “What Obama’s New Overtime Rules Mean For You,” Dave Jamieson, May 18, 2016