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Controversial Overtime Rule Discussed

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A federal judge in the U.S. District Court in the Eastern District of Texas granted a nationwide preliminary injunction Tuesday that blocks implementation of new overtime rules promulgated by the U.S. Department of Labor. They had been set to go into effect Dec. 1st.   Mountain Lake PBS in Plattsburgh recently aired a forum on the controversial rule and what it might mean for employers and their workers throughout the region.
The new Fair Labor Standard Act Overtime Rule would make more than 4 million workers eligible for overtime pay.  But many employers are not familiar with the change.   During the forum on Mountain Lake PBS, labor and employment attorney Jacqueline Kelleher with the Stafford Owens Law Firm tried to explain what the rule entails.   “Right now through most of the country if you qualify as an exempt employee the minimum that you have to be paid in order to not be paid overtime is $23,600 per year.  So what this rulemaking does is the weekly wage will go from $465 to $913. So that equates to an annual wage of $47,476. So that is a huge increase. New York the required wages have gone up over the years so the jump isn’t as big. But it’s still very significant.”

Plattsburgh North Country Chamber of Commerce Vice President for Economic Development Susan Matton noted that while there is a lot of information being disseminated, she heard confusion and concerns during workshops to prepare employers.   “Some people were saying well we’ll need to go back now. We need to go back and consider how do we comply? How do we make sure that we’re in compliance with this and how do we make sure that this along with all the other laws and regulations that are in place, that we’re working them all together and making sure that everything is being done as it’s supposed to.”

The  Northeast Group employs 63 full-time, about a dozen part-time on-call individuals and some temporary workers.  Vice-President and Chief Financial Officer Betsy Vicencio says when the rule came out they had to review the salary category for about a dozen of their employees.   “We had to reconsider how we qualified them. We went through and recalculated and reclassified them from a salaried employee exempt from overtime to a salary non-exempt from overtime. We calculated their pay rate.  So we made a minor modification to their pay structure that really benefitted them. And it’s curious because it felt weird to our employees. Like I’m not really a salaried employee anymore which comes with it some status.  Now they have to punch the time clock. I think right now I’m calculating for those twelve employees about an 8 percent increase in the pay that we will pay.”

Employers are also readying for higher minimum wages being implemented by the states. SUNY Plattsburgh Professor of Economics and Plattsburgh mayor-elect Colin Read says adding the new federal rule could hurt small employers.   “I worry most about many of the small mom and pops. They’re looking at really a substantial increase in wage costs or salary costs or converting more people to hourly.  And then to ensure they have the number of hours per week instead using more part time rather than full time.  So for this group you going to have a very profound effect and kind of a little bit of an unintended consequence as well in discouraging some of them from hiring in the traditional full time 40 hour a week mode.”

Audio is courtesy of Mountain Lake PBS.

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