WASHINGTON — Millions of workers could be affected when a new federal law regarding overtime goes into effect Dec. 1.
The Fair Labor Standards Act changes the threshold for overtime pay to $47,500. Salaried workers who make less than that amount will become eligible for overtime pay when they work more than 40 hours a week.
Under current rules, companies can avoid paying overtime to full-time salaried employees if they make as little as $23,660 by classifying them as exempt. Those workers can’t make overtime pay even if they work more than 40 hours a week.
But with the Fair Labor Standards Act going into effect, those rules change.
The White House said the 40-hour workweek has eroded over the years with more workers putting in more time and not getting compensated.
Companies are anticipating higher payroll costs by paying out more in overtime or raising the salaries of employees so they reach the $47,500 threshold so they can still be exempt.
The salary threshold will be updated every three years, with it expected to increase to $51,000 by Jan. 1, 2020.