Congratulations class of 2016! You have just successfully completed college and are now ready to embark on a journey to join the workforce, or perhaps start your own company. Recently, the Department of Labor released the final version of new federal overtime regulations, which means that if you have an annual salary less than $47,476, you are eligible for overtime pay. That might sound great at first, but let’s dive into this a little bit more and look at what it means for recent graduates. The real story is more complicated than it appears.
According to Forbes, 74% of millennials value flexibility in their work schedule, while 88% want work and life to be integrated, more than just work-life balance. The flexibility many of us seek will be in serious danger with these policies. In order to comply with the new regulations, many employers will shift salaried workers to hourly status, cut hours, or require employees to do more work in less time.
Answering those emails at 8:00 PM? How about working late on Wednesday so you can attend that young professionals networking event on Thursday? These seemingly minor decisions will now become a huge challenge for employees and employers once President Obama’s new overtime rule requires these hours to be meticulously tracked. We live in an ever-changing world where many people no longer work on a simple 9:00-5:00 schedule, and these regulations will seriously limit the flexibility that make many jobs appealing.
Are you a recent graduate who is Hispanic? Congratulations, according to Pew research you are part of the 15% of Hispanics ages 25-29 that have a bachelor’s degree or higher, compared to 40% of whites, 20% of blacks, and 60% of Asians. Hispanics also are more likely to start a business than the general US population. This new regulation will increase the cost of doing business, adding yet another barrier to opportunity for Hispanic entrepreneurs.
These federal regulations will hit small businesses harder than anyone. A study conducted by Oxford Economics estimated that 2 million retail and restaurant workers in the United States will be affected, of whom 32% will be converted to hourly and 11% will see a decrease in hours. Business will be forced to lower employees’ base pay and benefits in order to make up for the difference in overtime. This will lead to unhappy employees at their current jobs, as well as an additional barrier for individuals trying to enter new ones.
Do you think that recent graduates have a difficult path in front of them? These regulations will just be another barrier that they must be overcome to achieve the American Dream.