U.S. Government Offers Tips on Overtime Costs

January 9, 2004 - 07:26

 Since the recent inception of the overtime pay rule, there
have been a number of concerns from employers as to how to handle it in their
businesses. According to the Associated Press (AP), the new ruling guarantees
that overtime pay will allow low-wage workers to receive overtime pay as part
of new ruling. However, the payments may not come so easily because the
government is offering employers tips on ways they can keep their labor costs

The new ruling came in due to a
number of lawsuits from workers alleging that they were not being paid the
overtime they worked. The finagling ruling, which is a revision of the 1938
Fair Labor Standards Act, is expected to be issued in March explaining the jobs
that qualify the time-and-a-half owed to employees if they work more than 40
hours per week says the AP.

Some of the options include:

  • To
    cut an employee's hourly wages and add the overtime to equal the original
    salary, or raise salaries to the new $22,100 annual threshold, making them
    ineligible, according to the AP.
  • Adhering
    to a 40-hour work week.
  • Raising
    an employee's salaries to a new $22,100 annual threshold, making them
    ineligible for overtime pay.
  • Making
    a payroll adjustment that resulting in almost no or a minimal increase in
    labor costs by converting an employee's annual pay to an hourly rate and
    cut, with overtime added in to equal the former salary. Allowing employees
    to be working more hours for the same amount of money.

Though there is controversy
surrounding these tips, the Labor Department feels that the information is fair
and legal. The final ruling will come in a few months unless blocking efforts
are successful by Congress.

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