Jan 9, 2004
U.S. Government Offers Tips on Overtime CostsSource: Associated Press

Since the recent inception of the overtime pay rule, there have been a number of concerns from employers as to how to handle it in their businesses. According to the Associated Press (AP), the new ruling guarantees that overtime pay will allow low-wage workers to receive overtime pay as part of new ruling. However, the payments may not come so easily because the government is offering employers tips on ways they can keep their labor costs down.


The new ruling came in due to a number of lawsuits from workers alleging that they were not being paid the overtime they worked. The finagling ruling, which is a revision of the 1938 Fair Labor Standards Act, is expected to be issued in March explaining the jobs that qualify the time-and-a-half owed to employees if they work more than 40 hours per week says the AP.


Some of the options include :

  • To cut an employee’s hourly wages and add the overtime to equal the original salary, or raise salaries to the new $22,100 annual threshold, making them ineligible, according to the AP.
  • Adhering to a 40-hour work week.
  • Raising an employee’s salaries to a new $22,100 annual threshold, making them ineligible for overtime pay.
  • Making a payroll adjustment that resulting in almost no or a minimal increase in labor costs by converting an employee’s annual pay to an hourly rate and cut, with overtime added in to equal the former salary. Allowing employees to be working more hours for the same amount of money.


Though there is controversy surrounding these tips, the Labor Department feels that the information is fair and legal. The final ruling will come in a few months unless blocking efforts are successful by Congress.

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