A New Overtime Rule Might Make Millennials a Lot Richer
Millennials are about to get a whole lot richer. Thanks to a new rule announced by the White House on Tuesday, the salary threshold for overtime eligibility will be doubled from the current $23,660 a year to a robust $47,476 a year. That means that young people in the workforce who tend to work well into the night to help boost their careers will finally get compensated for their efforts. In other words, anyone who works more than 40 hours a week and makes $47,476 or less will be paid time and a half for their efforts.
Although the new rule—which officially takes effect December 1—stands to benefit workers of all ages, the Economic Policy Institute estimates that minorities, women, and young workers stand to gain the most. Millennials who invest a lot of time in plucky startups or other burgeoning enterprises for little immediate return but with the hopes of major future gain, will see a major spike in wages. Ross Eisenbery, the Economic Policy Institute’s vice president, estimates that the number of salaried employees ages 25–34 who benefit from overtime will increase from 9.1% to 38.4%.
And while overworked millennials will surely rejoice over Tuesday’s news, not everyone is popping champagne. Some observers believe that companies will lower salaries so that they don’t meet the new threshold or hire lower-skilled workers who don’t require salaries above a certain threshold. Still, despite the concerns, Tuesday’s announcement is good news for anyone who knows what it’s like to be the last one in the office.
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