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Business & Economy

Utah Businesses Brace for Overtime Rule Change

This month, the White House unveiled a labor rule change that will make millions of Americans newly eligible for overtime pay.

Under the new rule, salaried workers who earn less than about $47,000 a year will be eligible for overtime. That’s more than double the current annual salary threshold of about $23,000. Monica Whalen is Utah President for Employers Council which offers human resources and employment law advice. She says once the new rule was finalized, her phone started ringing.

“We’re fielding lots of questions and we’re planning lots of educational sessions because this is a significant change that will impact both employers and employees,” Whalen says. She says employers have a few options for salaried employees who make less than $47,000. You can pay overtime when the employee works over 40 hours, you can increase the salary, or you can limit the worker to 40 hours a week. In some cases, employers may choose to hire other workers to make up for the time. “Bottom line – it’s going to cost you more for your labor than it did in the past.”

Whalen says the sectors that will be affected most are those who have mid-level managers. She says small businesses will likely face the greatest challenges. “The large majority of employers in Utah are small businesses, less than 50, less than 25 employees, and the increased costs for labor will significantly impact them because they have less of an ability to absorb those costs or spread them out among their operations.”

The overtime rule takes effect December 1st.

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