A new federal rule regarding overtime may soon have millions of American workers holding heavier pay checks. However, some employers see the change has a heavy adjustment.
Under the new rules announced by the White House on Tuesday, any salaried workers making less than $47,476 a year will automatically qualify for overtime pay when working more than 40 hours a week. That's roughly double the current threshold of $23,660.
"Stuff happens all the time at the local and state level and all it does is wind up hurting the small businesses," said Andrew Thornton.
The veteran is expanding his Downtown Coffee House in Shawnee into a roasting company. In order to make his dream come true, his small staff of salaried managers have to work long hours to perfect their roasting process and get the new business up and running.
"It's gonna affect our company extraordinarily if we have to pay them more, if we have to meet certain standards," he said.
Thornton may have to cut costs or hours and is trying to adjust by adding extra benefits to his employees. However, nonprofits will also be affected, possibly needing more money to operate.
"I think people are gonna have to be aware of that, that we're gonna need more money in order to do the same amount of work," said Mary Anne Matheny, CEO of Hope House.
Hope House provides services for victims of domestic violence. More than a dozen positions at the nonprofit will be impacted by the new overtime law. And hours can't be cut because it's such a specified field.
"What we're doing is really lifesaving work, so if we cut back, then that means that the services were providing get cut back as well," said Matheny.
The new rules go into affect Dec. 1, 2016.
4 possible scenarios new overtime rules could affect your pay:
If you are a salaried worker who falls below the new $47,476 threshold:
1. If you have managerial duties and work more than 40 hours a week, you will get overtime pay.
2. You could get a small raise. If you earn just below the new threshold, some employers may raise your salary above the threshold to avoid overtime costs.
3. Your hours could get cut. If you already work long hours, your boss may enforce an eight-hour day to avoid overtime costs.
4. Your employer could lower your base hourly pay to offset any overtime costs.
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Josh Helmuth can be reached at josh.helmuth@kshb.com
