Analyzing the new rule for salaried workers’ overtime payIn the News
June 2, 2016
Tom Spiggle is a lawyer in Arlington, Va., who specializes in representing employees in labor disputes. He applauds the new rule but recognizes it will mean higher costs for some U.S. firms.
The Times asked Spiggle to explain the new rule and its repercussions. Here’s an edited excerpt:
How many workers are affected by this change?
The Obama administration is saying around 4 million [additional] workers. Under the current law, it’s about 7% of [full-time salaried] workers who are covered, who are subject to overtime. Under the new law, that percentage jumps to around 35%. We’re looking at about a fivefold increase in the number of workers who are covered.
There is also an automatic update every three years?
That’s right. That’s one reason the administration updated the law because it wasn’t indexed to inflation. I believe in the 1970s as much as 60% of the workforce was covered. But as that salary threshold remained the same and inflation increased, more and more workers were moved outside of coverage. Now there will be an update every three years to index to keep pace with inflation.
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