By Abril Preciado, CBS 4 News
BROWNSVILLE, Texas (KGBT) — The new year brings a new overtime rule along with a pay raise for an estimated 1.3 million American workers.
The U.S. Department of Labor announced they will raise the threshold at which employees are no longer eligible for overtime to $684 per week, equivalent to $35,568 a year. That’s a 50% increase from the previous threshold of $455 per week.
“With these new regulations we’re expecting a lot of changes throughout the whole spectrum with businesses to comply with overtime laws,” Josh Mejia , Executive Director at the Brownsville Community Improvement Corporation said. As he explained the Fair Labor Standards Act.
Mejia says that anybody that falls underneath that annual salary by law is required to get paid overtime.
“We’ve been noticing that a lot of employers have been hiring people for a certain pay so that they can overwork them so they fall at that exempt status condition.” he said. “With those regulations that overtime that wasn’t paid for before now has to be paid. That’s probably the biggest impact we will see this new year.”
Mejia also adds that a lot of businesses should be able to adjust to the rule including in the Rio Grande Valley.
“We’ve been seeing historically for the past six months increases in sales tax revenue in the Rio Grande Valley so we feel the economy is good right now for those adjustments to be made,” he said.
The rules taking effect this week will also allow employers to use non-discretionary bonuses and incentive payments to as much as 10% of the exempt threshold.
This rule will go into effect on January 1, 2020.
To find out more information of the regulation you can visit the U.S. Department of Labor website.