Q&A: How new US overtime rules could help or hurt employees

The new overtime rule the Obama administration issued Wednesday could mean thicker paychecks for some Americans who work longer hours — or, just reduced time on the job.

Labor Secretary Tom Perez says the change, which will take effect Dec. 1, will qualify 4.2 million more workers for overtime pay.

Business groups argue that the rule will raise compliance costs and paperwork because companies will have to track workers' hours more meticulously.

The National Retail Federation says about one-tenth of salaried employees newly eligible for overtime will likely receive raises high enough to lift them above the $47,500 threshold.

Managers paid more than the threshold are ineligible because they fall under the so-called white collar exemption that excludes supervisors and professionals from overtime.

[...] the NRF, for example, says that more than half of salaried retail and restaurant employees who earn less than the threshold will likely have their base wages cut.

[...] even after receiving overtime pay, their overall income won't change.

Administration officials disagree that pay cuts will be so widespread.

"For most employees, that's viewed as a demotion," says David French, a senior vice president at the National Retail Federation.

Hourly workers typically receive fewer benefits and are unlikely to have paid vacation.

Employees who are eligible for overtime can still be paid a salary and given flexibility over their work time.

Melissa Bard, chief human resources officer at East Carolina University, said the school has 286 employees who currently don't receive overtime but would become eligible under the new rule.

The liberal Economic Policy Institute estimates the new rule will benefit roughly a third of salaried employees in the agriculture, restaurant and hotel, construction and retail industries.