A new labor law rule - kicked back by a federal judge last month -
that would have made almost four million Americans eligible for overtime
pay may still have resulted in higher wages for the workers it was
intended to help.
The new legislation would have significantly
raised the salary cap under which employees were eligible to earn
overtime. In response, some large companies, such as Walmart, gave
raises to workers whose pay fell just under the new threshold, making
them ineligible for overtime pay. Other companies reclassified salaried
overtime-exempt workers as hourly employees, which would make them
eligible to earn overtime for workweeks longer than 40 hours.
"There's a whole set of companies that had already communicated to their
employees that they were going to change their employment status or
give them raises," said Brian Kropp, HR practice leader at CEB. Because
the rule was halted only about a week before it was set to take effect,
many companies had already made the switch.
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