New federal rule may make employees eligible for overtime pay

Many salaried workers throughout the region soon may be entitled to overtime pay.

Local businesses now are set to the task of determining the logistics.

On Wednesday, President Obama and Secretary of Labor Thomas Perez announced the publication of the Department of Labor’s final rule updating overtime regulations.

The rule will extend overtime-pay protections to workers who make less than $913 per week, or $47,476 annually.

The rule takes effect Dec. 1 and may be updated every three years.

Though some local businesses have been aware of this rule coming to fruition, others have been taken by surprise.

“I don’t think it’s been on a lot of people’s radar,” John Mehner, president of the Cape Girardeau Area Chamber of Commerce said. “But it’s definitely going to affect a lot of local businesses.”

“I would not be surprised to see salary employees reclassified as hourly or a possible change to incentive-based employees as well as a change to benefit packages,” Brian Gerau, president of the Jackson Area Chamber of Commerce, said in an email.

According to The Associated Press, the White House estimates the rule change will raise pay by $1.2 billion a year over the next decade.

Some employers, though, might choose to reduce their employees’ additional hours to avoid paying overtime, thereby making the workers’ schedules more consistent.

“Either way, the worker wins,” Vice President Joe Biden said during a conference call with reporters Tuesday.

Not all local employers will be affected by the rules.

Andrew McKee, a manager at the Cape Girardeau Denny’s, said the management tends to keep employees’ work hours below the threshold of 40 set by the government, so his business will remain largely unaffected.

However, he said, “I think it’s a great rule.”

Those with hourly employees also will be able to continue with business as usual.

“The majority of our staff are hourly and already benefit from the overtime pay past 40 hours,” Keith Boeller, president and CEO of Chateau Girardeau, said in an email. “This is not something that should impact us greatly.”

James Cook, director of human resources at Southeast Missouri State University, said the university has been aware of the new rule and has been making efforts to be prepared for its enactment. But until it was finalized, the university couldn’t be sure of what the new rule would be.

“We’re like everyone else in the United States this morning: We woke up, and there were new regulations,” Cook said.

Though the university falls under an exemption for higher education, many of its professional staff could be affected, Cook said. Other exemptions exist for city and state workers and not-for-profit organizations.

Mehner said the chamber would recommend its members consider whether their employees fall under the definition of a salaried employee. Those employers that have salaried employees “need to have them really, closely track their hours over the next few months and take a look at what that looks like,” Mehner said.

He said employers should make staffing decisions based on those findings, whether it be raising salaries, paying overtime or changing responsibilities among employees.

“They need to take some time to review it, look at it and figure out what’s best for their individual businesses,” he said.

bbrown@semissourian.com

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