When someone is working as a salaried employee in the service industry, retail or anywhere for that matter, they should get paid adequately for the hours they work.
For that reason the Trump administration’s decision last month to boost the base salary threshold for what employees must get paid overtime was a good move.
The rule, set to go into effect Jan. 1, makes it so that employees must get paid an annual salary of at least $35,568 to be exempt from making overtime, which is paid at time-and-a-half for hours over 40 in one week.
It is increasing from the current base of $23,660.
That is good news for the estimated 1.3 million people who will get a pay hike.
There are many salaried workers who are taken advantage of and required to work far more than they are being fairly paid for.
They sign up for the job because it sounds good on paper. Then, in reality, the job essentially turns into a minimum wage job when all the hours are added up. That shouldn’t be the case, and that $12,000 increase will be a welcome change to help ensure workers are fairly paid.
At the same time, the change is very welcome from what had originally been proposed in 2016 under the Obama administration.
Employers were previously faced with the prospect of having to raise the base salary wage to $47,476.
At the time, we were opposed to that jump that doubled the base wage salaried employees needed to make.
For one, it was a drastic jump. Also, it had the ability to have unintended consequences. It likely would have resulted in the base hourly wage dropped for employees so that the salary jump wouldn’t have been so drastic.
Another unintended consequence is that it could have hurt employees with flexible salary work arrangements who were able to work more some weeks and less others to meet the needs of their lives and the company.
A Wall Street Journal article explained that some states are still moving forward with increasing the base salary to higher rates.
In California, for instance, workers at large employers earning less than $49,920 are paid overtime now; in 2023, workers earning less than $62,400 will be eligible, the Wall Street Journal article stated.
But it’s different for states like California, where the cost of living is more.
The increase in the base salary wage, which hasn’t changed since 2004, is good news. It’s good for workers that it’s increasing and for employers who should be able to, much more easily, sustain this increase without hurting the business.