Dive Brief:
- In a move expected to be made by employers trying to get out in front of the new overtime law, Wal-Mart increased entry level salaries from $45,000 to $47,746, according to Reuters. The increase puts it just above the threshold of $47,476 set by the Department of Labor.
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Championed by the Obama Administration, the rule says salaried workers making less than $47,476 will be eligible for overtime. It goes into effect come Dec. 1. Retail and service industries will be the most affected.
- State governments also employ a substantial number of workers potentially in line for pay increases. As such, almost half the states (21) have united in a lawsuit that warns of the hardship the increase in pay puts on state budgets.
Dive Insight:
This is one way to solve the OT dilemma. Wal-Mart weighed the pros and cons and decided paying full salary is the best method to ensure it didn't have to pay out more in OT. The expectation is that many large employers will do the same.
Since it so far looks likely the rule will go into full effect on Dec. 1, more big-name companies may soon start to announce their solutions. Concerns raised at the outset centered around employers being able to make the math add up. HR plays a key role with accounting in determining how many salaried, hourly and part-time workers will be required to keep companies operational and profitable.
