About 900 Mecklenburg County employees who now draw salaries will be notified Wednesday that they will be paid hourly rates – and become eligible for overtime.
The switch, effective Nov. 23, is required by recent changes to the federal Fair Labor Standards Act by the Labor Department. Those changes raised the pay ceiling for workers eligible for overtime from $23,660 to $47,476 a year. More than 4 million workers nationwide will be affected.
The county has budgeted $1 million to pay extra overtime in the second half of the 2017 fiscal year. Managers will be asked to sign off on any extra work hours.
“It’s a best guess” of added costs, said human resources director Joel Riddle. “Hopefully through managers and supervisors being more cognizant of this, of employees being more cognizant, and with alternative work schedules they can manage their hours as best they can.”
Mecklenburg County has 5,408 employees including temporary workers. Of those, 2,154 are now paid salaries and 3,254 are hourly workers.
A small number of staff salaries, totaling a few thousand dollars, will be raised above the new overtime ceiling, Riddle said. “We plan to provide the same level of service,” he said.
County Manager Dena Diorio, in an email Tuesday to her workforce, said county employees tell her they regularly work more than 40 hours a week.
“This change will necessitate that the county manage the work hours for significantly more employees to 40 hours/week, which I believe will provide many staff with improved work/life balance,” she wrote.
Commissioner Bill James, a conservative Republican who represents southern Mecklenburg, called the federal change overreach by the Obama administration and predicted it won’t have the intended result.
“I would have objected to it, but there was no way the Democrats were going to publicly disagree with Obama,” he said by email. “For most companies, this will cost working people jobs.... Businesses will make it up. It is foolish to think they will just agree to pay workers 40 percent more.”
Congressional Democrats and labor groups had lobbied for the change, saying it could stimulate the economy by increasing workers’ salaries to slightly above the new exemption threshold.
The Obama administration has noted that 62 percent of salaried workers drew overtime pay four decades ago, while only 7 percent do now.
Critics, including retail and fast-food businesses, warned the move would backfire by spurring employers to slash workers’ hours or take other steps in response.
Nationally, businesses are scrambling to respond to the change.
Some are reclassifying managers as hourly employees, meaning they'll have to clock in and out, with less predictable pay.
Others may raise workers’ salaries just beyond the new cutoff point, so they remain ineligible for overtime pay. And others are consulting with lawyers on their options.