Overtime Pay Increase Rule, Set for Dec. 1, Faces Challenges

Dominic G. Diongson
Published Date:
Nov 22, 2016

Deliverer Near Wall Street
The new overtime pay rule that goes into effect Dec. 1 faces challenges from legislators and President-elect Donald Trump, who begins his term in January, according to The Wall Street Journal.

The rule was set to be a defining piece of legislation for President Barack Obama as a way to lift the wages of millions of workers eligible for overtime pay. The law will require employers to pay overtime to workers who have an annual salary of less than $47,476, a significant increase from the current limit of $23,660, which was last revised in 2004.

The Journal reports that big companies such as Wal-Mart Stores Inc. have started increasing the pay of some workers to prevent paying overtime, but some small businesses say that the new measure would limit their ability to grow by hiring fewer workers. Still, some employers are taking creative steps to skirt the new law. The Journal cited one accounting firm, JLP CPAs, as moving some salaried workers to hourly pay.

Many Republican lawmakers view the higher pay threshold as excessive, though Trump hasn’t commented on the matter, according to the Journal.

UPDATE: The Journal reported late Tuesday that a federal judge in Texas argued against the Labor Department's planned increases saying that “the department exceeds its delegated authority and ignores Congress’s intent.”

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