New Overtime Rules Hot

0.0 (0)
Write Review

As of December 1, 2016, any employee earning a salary of under $47,476 is entitled to 1.5 times base pay for each hour worked in excess of 40 hours per week. The current threshold is $23,660. 

What does this mean? Employers often classify employees with professional or managerial status as "exempt", paying them salaries with no overtime compensation rather than hourly with overtime compensation. As of December, even a high-level employee will be entitled to overtime pay if his or her salary is less than $47,476 per year. Thus, employers of salaried employees earning less than this amount will have three options:

l  Pay overtime compensation 

l  Eliminate overtime

l  Raise salaries above the threshold

In my opinion, professional service firms will be most hard hit. Entry level accountants, attorneys, engineers, etc. are typically salaried and work massive amounts of overtime. These firms rely on the "cheap" labor of new hires. I believe they will get around the new rules by simply ensuring entry level salaries are above the threshold. 

(Please note that opinions expressed are my own and not Morningstar's!)


This Website Is For Financial Professionals Only

User reviews

There are no user reviews for this listing.
Already have an account? or Create an account

Let’s Make This Easy


We're the right news and professional education solution for you if you’re a fiduciary who:

--  holds a CFP®, CIMA®, CPA, CPA/PFS, CFA or other designation requiring CE annually  

--  likes the work of Fritz Meyer, Craig Israelsen, Bob Keebler or Andy Gluck

--  relies on economic fundamentals

--  broadly diversifies a core of client portfolios in low-expense funds

--  strategically invests based on MPT

--  offers tax and financial planning advice

--  values thought leadership when bad news breaks 


A4A courses, accredited by the CFP Board, IWI, and NASBA, power a special brand of independent financial advice. We also leverage the Web to benefit of consumers as well as fiduciaries enrolled in our classes.