Much-Debated Overtime Rule Faces Uncertain Future Under Trump

Much-Debated Overtime Rule Faces Uncertain Future Under Trump
From Recruiter - January 9, 2017

As youve likely heard by now, a new overtime rule was set to go into effect on December 1st, 2016, that would have expanded the number of people eligible for overtime pay by millions. Currently, workers who make less than $23,660 areautomatically eligible for overtime pay; the new rules would have extended overtime benefits to anyone making less than $47,476.

However, the measure was blocked in federal court just before going into effect, with opponents claiming that the Obama administration and the Department of Labor (DOL) had oversteppedtheir executive authorityby so drastically increasing the salary limit.

The DOL has said it strongly disagrees with the courts decision. With the election of DonaldTrump, who has vowed to roll back many of President Obamas initiatives, the future of overtime expansion is unclear. Many groups, such as the National Retail Federation, have opposed the rule while expressingsome support for a less drasticincrease in the limity.

The Preliminary Effects

There was a long lead time on the overtime rule, and many companies had already begun to prepare forit by the time it was blocked.

Employers were given more than six months to prepare for the final rule change under the Obama administration, and iCIMS data shows that many employers across various industries, geographical areas, and company sizes have already raised salaries and taken other measures in anticipation of the overtime rule change, says Josh Wright, chief economist for iCIMS, a provider of talent acquisition software-as-a-service solutions. While some of this may be due to the influence of upward wage pressure from the tightening labor market as a whole, it would be surprising if employers did not prepare carefully for this rule change.

According to iCIMSs findings, employers of many sizes had already taken steps to comply with theovertime rule by decreasing the proportions of newly eligible employees in their workforces.

Specifically, larger companies appear to be the most attentive in preparing for the potential new regulations, consistent with their resources to monitor and respond to policy changes in a proactive manner, Wright says. Relative to smaller companies, they saw larger decreases in the proportion of lower salaries, and this shift began in 2015.

What Now?


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