Today, The Obama administration unveiled a new rule that would let full-time salaried employees earn overtime pay if they make up to $47,476 a year, more than double the current rate of $23,660 a year.
The U.S. Labor Department estimates that this will impact 4.2 million workers, yet the plan was quickly criticized by nonprofit groups, universities and small business owners who said they would switch salaried workers to hourly positions to afford Obama’s new plan. Instead of seeing bigger paychecks, many workers will see fewer hours.
Linda Harig, vice president of human resources for the University of Tennessee, noted to the Washington Post:
Some colleges said they worried they might have to cut services or raise tuition prices to keep up with the guidelines. Harig, estimates that the university would need to spend an additional $18 million to afford overtime pay for employees who would become eligible under the new guidelines, such as admission staff, hall directors and people with post doctoral positions. That is the equivalent of a 4.3 percent increase in tuition, Harig said.
“We agree that there needs to be a change,” she said. “But we believe due diligence has not been done on the impact for higher education institutions.”
The Obama Overtime Act or Hour Reduction Plan