370,000 Texas Jobs Affected by Overtime Rule

Date: May 30, 2016 Last Edit: May 31, 2016

Come Dec. 1, business owners across Texas and nationwide will be paying higher labor costs as a result of the Department of Labor’s new overtime rule. The DOL estimates the regulation will impact more than 370,000 workers in Texas.

The rule will raise the threshold at which employees are exempt from earning overtime pay—from $23,660 to $47,476. The Fair Labor Standards Act dictates that employees are not eligible for overtime pay if they are compensated at a minimum wage level (now $47,476), if they are paid on a salaried basis, and if they perform duties considered professional, administrative, or executive in nature. Now, under the new rule, the minimum wage level triggering overtime exemption is nearly double the old rate.

NFIB has spoken at length to the media about the harmful impact of this ruling, including decreased staff morale stemming from employment status changes, reduced hours, and falling pay rates.

For businesses that operate on calendar year budgets, this unplanned mandate for increased labor costs in the final month of 2016 complicates matters.

One small item of relief: Bonuses, incentive pay, and commissions can account for up to 10 percent of the salary threshold if the payments are made on a quarterly basis. However, the exemption level will continue to rise, tied to inflation, every three years, beginning on Jan. 1, 2020.

For more information, please visit NFIB.com/Overtime.

Related Content: Small Business News | Labor | Texas

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