The Labor Department is set to issue its final rule expanding a federal mandate on employers for overtime pay. The overtime rule makes more salaried employees eligible for overtime pay, a move that will have a big negative impact, warns CEI labor policy expert Trey Kovacs.
"The Obama overtime rule puts a huge cost and regulatory burden on employers, who will face pressure to cut back on benefits and full-time employees.
Cutbacks now will also have a negative long term impact, hindering workers from reaching a significant rung on the career ladder—becoming a salaried employee and accruing the many benefits that come with it. Salaried employees enjoy a steadier income and receive greater benefits and opportunities, like healthcare, paid leave, flexible schedules, and a better chance for advancement. The overtime rule will mean many salaried workers on a management track will be downgraded to hourly status, with restrictive schedules and worse career prospects.
The overtime rule won’t be the windfall for workers the administration claims."