Doctors of optometry could see a rise in labor costs under new federal overtime rule

Doctors of optometry could see a rise in labor costs under new federal overtime rule

"Obviously that means higher labor costs for millions of small businesses regardless of whether they're making more sales, generating more revenue, or dealing with other rising expenses."

Doctors of optometry could see a bump in their labor costs under a new federal rule that boosts overtime pay for many salaried workers.

Starting Dec. 1, 2016, private employers around the country will be required to pay overtime to their salaried employees who earn less than $47,476 annually and work more than 40 hours a week. Employers who fail to comply with the new rule may be subject to a complaint with the Wage and Hour Division of the U.S. Department of Labor (DOL).

Although the new rule will affect about 4.2 million employees nationwide, that's only about 3 percent of workers subject to the Fair Labor Standards Act. The change in the overtime threshold, announced May 18, is designed to give a lift to middle-class workers.

Among the rule's changes, employers will be required to provide overtime pay to almost all salaried employees earning:

  • $47,476 or less a year ($913 a week). That threshold is currently $23,600 or less annually ($455 per week)

  • Between $47,476 and $134,004, unless they are designated "white-collar" or exempt employees

  • More than $134,004, unless they are:

    • White-collar or exempt employees, or

    • Customarily and regularly performing at least one of the exempt duties or responsibilities of a white-collar employee

Under the new rule, the overtime thresholds will be readjusted every three years, starting in 2020. Employers are still not required to pay overtime to employees who are doctors—including doctors of optometry and ophthalmologists—regardless of the doctor's salary level.

For more information on how the overtime rule applies to your practice, please see DOL's final rule announcement, General Guidance for Private Employers and Small Business Guide to White Collar Exemptions.

"This is a step in the right direction to strengthen and secure the middle class by raising Americans' wages," President Barack Obama wrote in an email. "When workers have more income, they spend it—often at businesses in their local community—and that helps grow the economy for everyone."

But not everyone sees eye-to-eye on the impact of the new rule.

The National Federation for Independent Business (NFIB) represents about 325,000 small businesses across the nation. NFIB President/CEO Juanita Duggan predicted higher costs for small businesses, the disappearance of entry-level positions and the conversion of salaried jobs into hourly positions.

"Obviously that means higher labor costs for millions of small businesses regardless of whether they're making more sales, generating more revenue, or dealing with other rising expenses," Duggan says. "Many are struggling now, and they'll have to make tough choices that might affect the very same workers whom the Department of Labor thinks it is helping." 

If you have questions regarding the new overtime regulations, please contact AOA Regulatory Policy Specialist Jensen Jose at jjose@aoa.org.

May 30, 2016

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