It’s a concern. In December the Department of Labor is raising the overtime bar. The new threshold where a company is required to pay overtime is $913 per week or $47,476 a year.
This — of course — is for full-time workers.
Vice President Joe Biden announced the change last week and said, “Companies will have a choice. Pay their workers for the extra hours they put in, or cap their hours at 40 hours a week.”
Currently the threshold for overtime pay is $455 a week or $23,600 annually. So the jump is significant. And the new rule says it will be revised ever three years and will be maintained at the 40th percentile. So by 2020, the experts predict, it will be $51,000.
The change has the insurance industry buzzing and concerned. In September of last year, PIA National filed its concerns with the department. The association said the increase — at 113% — is enormous. The comments were based on a survey of PIA members who reside in higher cost of living areas. “This considerable increase will negatively impact our member agencies' employees and put a strain on the operation of their small businesses,” the PIA said.
PIA wants the threshold paired back.
Other associations are also worried. Tom Santos of the American Insurance Association (AIA) said, “The Department of Labor’s adoption of changes to the overtime rule will have negative consequences for both employees and employers in the insurance industry. Due to the diverse nature of our industry’s workforce, these changes will not be helpful.”
He continued, “The rules will not provide the workplace flexibility sought by employers and employees alike. We believe that this rule will result in a scramble to reclassify employees that will ultimately undermine job security and future opportunities for employees.”
Source link: Insurance Business America