Dive Brief:
- Now that the federal government's new overtime rules are in place, they could also affect benefit plans, according to an article at the Huffington Post.
- Benefits issues, including eligibility and changes in benefits levels could be affected, writes Lenny Sanicola, a benefits professional with WorldatWork.
- Term life policy costs could be particularly affected because they're often based on salaries, which will be pushed up in some cases by the rules, he wrote.
Dive Insight:
Sanicola concludes that an employer's approach to the regs will probably impact both the availability "and the level of various employee benefits, depending on the organization’s final approach to compliance with the new regulations."
It's one more serious bottom line issue for employers who are currently calculating how they will institute their plans resulting from the new FLSA rule, he writes. Luckily, employers have more time than expected. Most rules have a 60 day compliance window, but the new rule gives employers until Dec. 1.
The Labor Department estimates the measure will affect 4.2 million workers in its first year, making them eligible for overtime when they previously were not. That is an estimated 3.2% of all FSLA workers, according to the department.
Loss of benefits would be a clear loss for the goals of the regulations, which have been a priority of President Obama for years. The White House stated in a fact sheet last year that 62% of full-time salaried workers were eligible for overtime pay in 1975, but the salary threshold has changed only twice since then. By last year, only 8% of those workers were eligible, and the threshold was $23,660 -- below the poverty line for a family of four.
