Change in Overtime Regulation

Last month, the Obama Administration announced that the salary cutoff for overtime pay is being nearly doubled from $23,660 to $46,476 per year. This regulation, which will be effective December 1, 2016, will extend overtime compensation to workers whose annual salary is less than $46,476. An expected 4 million Americans will now be entitled to overtime pay within the first year of implementation. How does this affect small businesses? Minimum Wage Increase vs. Salary Increase This regulation expanding overtime privileges is similar to the consistently increasing minimum wage, as both are components of the expansion of workers’ compensation. There are differences, however between the minimum wage and new salary regulation. The salary law does not mandate companies to increase their employee’s yearly earnings – it just entitles workers to overtime. Impact on Small Businesses