Obama Signs Executive Order Expanding Overtime Application to More Salaried Employees

March 19, 2014
President Obama's stated goal is to "increase dramatically the number of employees who are paid extra for overtime work." The memorandum provides little detail about the changes to come. SESCO expects that these new regulations will take effect in 2015.

BRISTOL, TENN. -- President Obama has signed an executive order that will dramatically expand the number of employees who are entitled to overtime pay, SESCO Management Consultants is warning its clients. SESCO is the human resources consulting firm that provides information and services to members of Plumbing-Heating-Cooling Contractors - National Association.

SESCO believes that rules yet to come from the Department of Labor will expand the types of workers eligible for overtime pay by redefining the white collar exemptions for salaried workers.

While the memorandum provides little detail about the changes to come, SESCO predicts the Department of Labor will raise the current minimum guarantee salary threshold of $455 per week ($23,660 annually), to as much as $1,000 per week ($52,000 annually). Thus, for a position to be eligible for an overtime exemption, he/she must be guaranteed at least $52,000 per year. This annual salary is more than double the current requirements and will instantly require employers to pay overtime for those making less than the expected $52,000.

SESCO believes the new rules will take effect next year.

How will you handle your labor costs if more of your employees become eligible for time-and-a-half? Join the discussion at CONTRACTOR's Plumbing Talk Forum.

Voice your opinion!

To join the conversation, and become an exclusive member of Contractor, create an account today!

Sponsored Recommendations