Why Overtime Pay Could Cost Jobs

Vice President Joe Biden talked about the new overtime bill that will take effect at the end of the year. Under the old rule, you only qualified for overtime if you made less than $23,000.

“Family of four, that’s still in poverty. But starting December 1, 2016, we’re increasing the cutoff to $47,500.”

“I think doubling it in six months is a bad thing,” says Celia Collins with Johnstone Adams.

But some of these businesses and smaller companies may not be able to absorb the costs, causing them to make some serious changes.

“They’re going to lay off someone who’s not a manager and give the manager more duties to justify increasing their salary, that’s one possibility. They may combine jobs, they may just lay people off,” says Collins.

And it’s not just businesses; charities are affected by this as well.

“They run on really tight budgets and they’re dependent on donations and federal grants. Many charities in this town have wonderful managers and directors but they don’t make $50,000 and they’re working overtime when they have a fundraiser or a special event,” says Collins.

Meaning they may have to do without some services they’ve been providing. This was the same argument many had when discussing the minimum wage increase.

“It’s going to end up in losing employees, losing jobs, I think,” says Collins.

The original deadline for business to comply was 60 days, that was extended to six months.

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