Word of warning for any custom integration company that has exempt employees and pays them less than $50,440 per year in salary.
The U.S. Department of Labor, under a mandate from the Obama Administration, is raising the threshold that would require employers to pay overtime to all workers earning less than that amount. The previous threshold was $23,660 per year for overtime eligibility.
One person hopping mad about the proposed mandate is CEA CEO Gary Shapiro. Writing on TownHall.com, Shapiro calls the plan “deadly.”
“The American path of starting out in a junior position, putting in long hours to learn, prove yourself and stand out will be blocked by government fiat,” says Shapiro. “Employers will be forced to hire fewer employees and start them at $50,000, or put rules into place blocking junior employees from burning the midnight oil to excel.”
He continues, “This is a deadly plan, harmful to youth and to American business, and it will especially hurt young entrepreneurs and startups who simply don’t have the money to pay higher salaries or overtime.”
He goes on the call the plan “counter to the American ideal of working hard to get ahead.”
The time period for commentary on these changes ended September 4. The change is based on a Presidential Memorandum put in place by President Obama on March 13, 2014.
What does it mean? In California, for example, overtime pay kicks in at more than 8 hours per day or 40 hours per week. For integrators, it might mean having to change their exempt/salaried employees to hourly.
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