SALARY CHANGES: HOW IT COULD AFFECT YOU
Many millennials have landed great opportunities. Just like most working Americans, pay is a top priority. There are, however, some changes with salary status on the horizon. Effective Dec. 1, the working status of millions could be affected by the new U.S. Department of Labor Act. If you are hovering around $47,476 or less, you will be eligible for overtime pay when working over 40 hours per week.
There are several things to consider before your employer approaches you regarding the salary change.
BELOW THE THRESHOLD
Salaried employees who earn an annual salary of less than $47,476 will most likely have a status change to an hourly employee. The reason is you will no longer be eligible to receive time and a half pay for working more than 40 hours per week. On the surface, this is good news for many. For others, there are some adjustments to be made.
- Monitoring your hours worked.
Arriving and leaving work was of no big concern for salaried employees. Becoming an hourly employee will require your employer to monitor your time more closely. That may mean clocking in and out for breaks, lunch and times away from your desk.
- Reconsider other perks.
Being a salaried employee comes with different perks and rewards. This varies by company. Review your total compensation plan and benefits to see what else may be impacted, such as 401K contributions.
- Lifestyle changes.
a. The changes will give new hourly employees more money. The work levels may not change, but more income will be coming to you. Consider now what you will do with it. Investments, savings and paying down debt may be at the top of the list.
b. Secondly, you may receive more time. If you have been working 50 . 60 hours per week, you will regularly get scheduled time off. Some employers may opt to do this in lieu of paying overtime. At any rate, you get time to spend with family, go to school, start your business or improve your quality of life.
c. Less frustration and stress at work. Job clarity will sure be a result of the new overtime changes. Job roles and responsibilities will be more specific. The culture change could make for a better workplace.
d. Less flexibility with your schedule. There could be lesser leniency for you to get the job done the way you used to. The determining factor will now be the financial impact to your hours varying per week and the perception you are not getting enough work completed.
The change could also mean the opposite in status change; hourly to salary. Employers may opt to give employees raises to move you to the salary status. This change could require you to consider the pros and cons of being a salaried employee.
- More hours at the new salary.
- Flexibility in your work schedule.
- Limited pay because there is no more overtime.
- A shift in your work-life balance.
Each employer has a different perspective and work culture. However, they are all required to follow the guidelines of the U.S. Department of Labor. Be open to adjustments employers will offer to make the new overtime rule benefit all.