LANSING, Mich. (WLNS) – As of Wednesday, the annual salary threshold where companies can deny over-time pay will be doubled from $23,660 to nearly $47,500. That should amount to 35 percent of salaried workers. The current rules only cover seven percent. In the fast food and retail industries in particular, many employees are deemed managers and made to work long hours- but are barely paid more than the people they supervise. Obama Administration officials say this could have a big impact on people’s lives, but some aren’t happy to hear the news.
“You keep layering layers of cost and layers of complexity that has a consequence. And the consequence is always jobs or sales or company survival all together,” says Small Business Association of Michigan President Rob Fowler.
He says the rule changes have a big business mentality, but will wind up hurting small businesses. For him, that means a frustrated office.
“I think it would hurt employee morale because of less flexibility.”
That’s because instead of having a salary job, some would be switched to hourly pay. But Michigan League for Public Policy President and CEO Gilda Jacobs says going hourly may not be any different from these workers’ current situation.
“Some of those folks are making almost exactly the same that salary workers are. So we’re really talking about leveling the playing field. People that work more than 40 hours often have childcare issues, often have unpredictable schedules, they may have transportation problems.”
Michigan State University Assistant Professor Stacy Hickox says these issues and cost concerns could change the business landscape.
“Employers will use overtime less. And they may have to hire an extra person. Rather than paying someone overtime for 20 hours of overtime, they might hire an extra person or a part time person to fill in that gap.”
The new rules go into effect December 1.