New overtime rules going into effect on Monday simplify regulations for small businesses, Small Business Administrator Hector V. Barreto said in a statement.
The new rules guarantee overtime protections to 6.7 million workers earning $23,660 per year or less. About 1.3 million salaried white collar
workers will gain up to $375 million in additional earnings per year. Another 5.4 million salaried workers will get a guarantee of overtime rights.
"With these new rules, small business employers will have more clarity should they decide to hire more employees without the fear of additional litigation," added Barreto.
However, the new rules state that salaried workers who fall between $23,660 and $100,000 a year might lose overtime based on a duties test, which describes the tasks that determine whether a worker can, for example, be classified as a professional ineligible for overtime. Those making more than $100,000 will lose their overtime rights unless they do not regularly perform professional, administrative or executive duties.
Several groups have produced studies and reports pointing out what they say are loopholes in the rules through which many white-collar workers -- six million, according to Ross Eisenbrey, vice president of the labor-backed Economic Policy Institute -- could lose overtime.
But the Department of Labor disputes that analysis and says it changed the rules because they desperately needed updating. The old rules did not mesh with the new economy, causing increased litigation, officials argued. Overtime class-action suits have doubled since 1997 and outnumber discrimination suits for the first time.