Obama’s overtime pay rule will cost Purdue $7-9 Million annually

President Obama executive order issuing new overtime pay will have a big financial impact.

While many scoff at that notion, estimates of cost are starting to roll out. Here in Indiana, Purdue University released what it will have to financially absorb.

Last week, the Department of Labor issued a new rule for overtime regulations that will allow exempt, or salaried, white-collar employees to receive overtime pay if they work more than 40 hours a week and make less than $47,476. It’s a significant increase from the current $23,660 threshold.

About 1,200 exempt employees total — ranging from business managers to admissions professionals — will soon be eligible for overtime pay at Purdue.

It would cost the university $7.2 million if it raised all their salaries above $47,476, Klingerman said.

That could be a cheaper option than giving out overtime. If every eligible employee worked five hours overtime every week, he said, the university would pay an extra $8.6 million annually.

Numbers via jconline.com


One Comment

  1. The cheaper option would be to cut everyone’s pay by 15%. Employees could get their previous salary back by working 5 hours of overtime.
    The notion that this law has to cost anything is ridiculous.



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