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Pay changes possible for 100,000 Michigan employees

Some salaried workers in Michigan receive no extra pay despite working very long hours. Employers obviously benefit by knowing in advance how much a worker will receive each week. However, the White House believes that current employment rules are unfair and wants the Department of Labor to change them.

Under new rules announced by President Obama, some administrative workers and managers at the lower end of the pay scale would be eligible for overtime. The directive has the potential to change wages for as many as 100,000 Michigan employees and a total of five million workers nationwide.

Under current regulations, some salaried employees making as little as $23,660 per year are denied overtime. President Obama proposed raising the level to $50,440. Nothing would change in the "duties test" outlined the Fair Labor Standards Act except the lowest allowable level of salaried employees exempt from overtime. Other rules would remain in place governing whether a worker is exempt or non-exempt from overtime.

The White House proposal currently is undergoing a 60-day period of public comment. Members of Congress could try to delay enactment, but approval of congressional lawmakers is not required for the president's new overtime rule to become effective.

President Obama noted that it has been so long since the rule was overhauled that many salaried managers and administrative employees are earning income below the poverty level. The overtime rule was updated in 2004, but that's been the only change made to it since the 1970s.

Union representatives are thrilled with the proposal, but business organizations predict employment problems -- forced worker firings and trimmed hours. A leader with the Government Relations for the Michigan Business and Professional Association thinks small businesses are already struggling to comply with changes in health care laws and marital benefits for same-sex couples.

An attorney can explain how the White House proposal or other labor rules may affect an employment claim.

Source: Detroit Free Press, "Obama unveils overtime rule for salaried workers," David Jackson, USA Today and Todd Spangler and Lauren Pankin, Detroit Free Press, June 30, 2015

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