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Proposed Overtime Rule Could Cost Businesses up to $664 Million


The Department of Labor unveiled a new proposal on Wednesday to expand overtime eligibility for 3.6 million workers.


"Every employer that's subject to the Fair Labor Standards Act is going to be subject to this rule if it becomes final," explains Jason Reisman, a partner at the Philadelphia-based law firm Blank Rome focusing on labor and employment. The FLSA generally applies to businesses generating revenues at least $500,000 annually.


If the measure goes into effect, employers will need to determine if they want to raise their employees' salaries if they don't want them to receive overtime. Or, they'll need to reclassify their workers.

But employers don't need to implement any changes right away, Reisman says, because there is a chance that the rule won't come to fruition. That's what happened with the Obama-era rule after U.S. District Judge Amos Mazzant struck it down a week before it was set to kick in.

"There were many employers that were trying to get out in front of it that made changes and gave people raises," Reisman says. "Then the rule was struck down and it was a very hard spot to be in."

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"Proposed Overtime Rule Could Cost Businesses up to $664 Million," by Melissa Angell was published in Inc. on August 31, 2023.