Overtime pay is defined by the US Department of Labor (DOL) as being one and one-half times the current regular hourly pay for an employee.
Effective December 1, 2016 there are new rules for how eligibility for overtime pay is determined for US employees as announced in May 2016 by the US DOL.
Before explaining what the changes are, let me create a scenario that will help to bring the effects of the ruling to life.
Meet Jake...
Meet Jake, a husband and father. Jake is employed by XYZ LLC as a carpenter and furniture delivery supervisor. Jake often works 50 hours a week to complete his required building and supervisory duties. Because Jake is considered a part of the management team, he is not eligible for overtime per XYZ HR guidelines. Jake’s salary is $32,100 annually. No matter how many hours Jake works, his company is not obligated to extend overtime pay to him.
Until December 1, 2016 the annual earnings threshold for the overtime pay mandate is $23,660. What this means is that anyone that earns below $23,660 annually is required to be compensated with overtime pay regardless of their positon or title. Earning above this threshold takes an individual out of the mandated overtime pay as noted by the Department of Labor. It is also common for employees that are in managerial, administrative or professional roles to also be exempt or ineligible for overtime pay. Some employers have policies to also extend overtime pay to employees in these groups even though it is not mandated by the DOL.
The New Overtime Pay Rules
The new Department of Labor overtime pay rules will raise the overtime annual salary eligibility from $23,660 to $47,476. Under this new ruling that goes in effect December 1, 2016 Jake will be eligible for overtime pay (one plus one-half times regular pay) for any hours over 40 in one week. Jake becomes eligible for overtime since his annual salary is below the new $47,476 threshold. Jake and others like him will see additional money in their paycheck if they work beyond 40 hours in a single work week going forward.
There are employers that are increasing the salary base for some employees to exceed the $47,476 annual base so that the overtime pay exemption remains. Not a bad thing for employees that meet this criteria! In multiple ways, this ruling creates a potential for an increase to the household income for many US workers.
Three key points of the new Department of Labor Overtime Pay rules:
- Employees earning less than $47,476/year are eligible for overtime pay for work contributed beyond 40 hours in a single workweek. Overtime pay is equal to one and one-half times the current regular pay. The earnings threshold for this eligibility before this 2016 ruling is $23,660/year.
- The effective date for this change is December 1, 2016.
- The earnings threshold for overtime pay eligibility will increase automatically every three years. The next increase is planned for the year 2020.
Overtime Pay Oppositions
There have been oppositions raised to this overtime pay rule change by 21 of our 50 states. These states are suing the Obama administration for overstepping their bounds by imposing fiscal mandates at the state level that could affect their budgets. Those states are Alabama, Arizona, Arkansas, Georgia, Indiana Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Mississippi, Nebraska, Nevada, New Mexico, Ohio, Oklahoma, South Carolina, Texas, Utah and Wisconsin. I’m watching these activities and will report to you what comes of these efforts. I will also share more of my personal thouhts and views on this subject.
If you or someone that you know fits the profile of one that may be eligible for overtime pay as a result of this ruling, instruct them to seek information on this new DOL ruling and get information from their employer as needed. Direct any questions that you may have on the details of the ruling to me here as comments to this post. I'm here to assist!
Stay in the know!!
When our financial markets go through periods of times when the trading prices of stocks are going up and down unpredictably, it is certain that a large number of individuals and institutions are buying and selling stocks in large volumes. If this goes on for many days (as it often does) we see the result of this high volume trading in the “up & down” prices of individual stocks and the overall financial market.
Volatility is defined as being likely to change in a very sudden or extreme way. Volatile markets are likely to have sharper up and down swings than what is considered normal.
I personally look at the closing numbers of the Dow, S&P and the NASDAQ to detect the effect of market swings. I consider a DOW closing price of at least 300 points higher or lower than the previous day as a pretty volatile day. Anything less than a 100 point DOW closing (higher or lower) for me is considered a calm or sideways market day. The market volatility is measured and reported by the CBOE Volatility Index or the VIX.
There are many theories and technical details associated with market volatility including beta, sigma and standard deviation. For our conversation here, these concepts are not important. What is important to know is that there is a single cause for volatility. That reason is uncertainty.
As we do after each presidential election, expect this. Don’t be alarmed or think that we’re in for an immediate financial apocalypse. The uncertainty that results from political party changes in the office of the US president always introduces a fair measure of market volatility. It is important to be aware of what’s going on and manage your investments in a way that minimizes your losses and harmonizes with your risk tolerance. Again, prepare for market volatility and be prepared to make the adjustments that you need to be able to rest well during times of high volatility.
Again, the sharp market swings are caused by investor uncertainty. Market volatility rarely means that things are in an unstoppable upward trend or that the stock market is crashing. Keep your head, be aware of what’s going on and work your plan!
If you don't have a plan for investing during volatile times put this on your "to-do" list. If you are needing to expand your knowledge in understanding and navigating the financial markets it is time to consider taking a class and/or hiring a financial professional for assistance. Because the Money reVerse vision is for financial self-empowerment you can find stock market investing as a part of Money reVerse University. 
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What is the market going to do after the election?
This is the question of which everyone wants the answer and the answer is nowhere to be found. As we know with all things in our financial markets, there are many opinions but of course when we’re talking about future events, all opinions are speculative at best.
From what I’ve read of the presidential candidates, there are four key areas of our financial markets that will be affected as a result of our upcoming election. They are international business relations, health care, taxes and consumer discretionary (optional) spending. Here’s a few points to consider on these four areas.
With a republican presidential win, we should keep our eyes on the implementation of international agenda items from Trump. If he honors his promises to reform international trade by withdrawing from the newly signed Trans-Pacific Partnership, renegotiating NAFTA (North American Free Trade Agreement) and other seemingly impactful measures, this is likely to cause a negative impact to our international trade relationships. In this case it will be noticed mainy by large cap US companies since they are more likely than mid and small cap companies to have multi-national operations.
Based on campaign promises from both Hillary Clinton and Donald Trump, there will be adjustments of some kind to the Affordable Care Act. As with the 2010 implementation of this health care reform, many health care business including insurance providers, pharmaceutical and medical device companies will be impacted by any changes that are made to this health care law. The implementation of this act caused an increase in the healthcare market sector. The nature of the next reform changes will dictate the overall effect of the stocks that comprise this market sector.
Spending for indulgence and non-essential extras will be impacted if there is less money brought into the household or if there are price increases on necessities. This is the reason to be aware of potential tax and interest rate changes that come as a new US president takes office.
Again, no one truly knows how our financial markets will react to our 2016 presidential election. Watching the key areas discussed here will keep you on your toes and having a better understanding of post-election changes that we see in our US financial markets.
Stay tuned!
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This chart shows the following pair of interesting facts:
1. The Dow, S&P and NASDAQ are all trading higher today than they did at the beginning of the year.
2. The Dow, S&P and NASDAQ set new all-time highs in 2016. These new highs have been in the record books for just over 60 days.
With all-time high records being set on all three indices, there is a high likelihood that there will be a market pullback in the future. All-time highs often result with a pullback and a market ""running start" before the next all-time high mark is hit. We are seeing that now as there has been a decrease in the index values since the Summer 2016 high values.
We’re still doing a pre-election focus on our financial markets. Stay tuned for more!
Carolyn
This chart shows that when the incumbent president party won the election there was an upswing in the S&P 500 for the year. There was an S&P 500 loss for the year if the incumbent presidential party did not prevail. If this trend carries over to the 2016 election, we will see a 2016 market upswing with a Clinton victory and a market downswing with a Trump presidential win.
The referendum or public vote was open to the people of the UK and the question posed to them was “Should the United Kingdom remain a member of the European Union or leave the European Union?” Think of this as residents of any of our 50 states being asked should we stay or should we leave the United States. In simple terms, that was the question.
The result was 51.9% of voters opted to leave the European Union and 48.1% opposing the change. The UK, also known as Britain is leaving the 28 state European Union.
Union. They felt that breaking away from the union was the only way to protect and restore the country’s identity, independence, culture and pride. From my readings I’m interpreting that the people of Britain felt that receiving immigrants from other cultures in large numbers contributed to their feelings of losing their identity.
British citizens that opposed the EU exit stated that there would be substantial economic consequences associated with leaving the union and noted that the financial impact of the exit does not justify taking such an action.
The vote for Britain to exit the European Union was passed on Thursday June 23, 2016 and as predicted, there was a notable downturn in the US, European and Asian financial markets on Friday June 24, 2016.
The Brexit vote marks the beginning of a new stage production on this topic. Since the vote we’ve seen celebrations, resignations, negotiations and immigrations. Unfortunately, there’s also been a murder of a political leader as a part of the madness. Much unrest on European soil as a result of this historic vote.
I’m praying for God’s will to be done on earth. I’m seeking the Lord for peace in the land and I’m praying that he will educate us with insight on the topic. I’m believing that he will show us how to prosper in these financial markets in ways like no one else. I’m giving Him the glory already on this!
Did this help to clear up any questions that you had on this topic? Let me know. I would love to hear from you!
Cards with embedded chips, when paired with updated card processing terminals in stores, will initiate processing that will result in a unique authorization code for each particular transaction being generated at the time of the transaction. The most important fact to note is that your credit card number will no longer be used for authorization and it will not be passed along to the merchant for this purpose. This lowers the exposure of your card number thus lowering the possibility of theft.
For this type of authorization to take place, the stores in which you shop will need to upgrade the credit card terminals that are at each Point of Sale station. When this is done, instead of swiping your card to pay for products and services, you will insert it into a machine slot like those at an ATM. You will then receive a confirmation from the machine that the card has been processed and it can be removed. One difference that we will need to note is that the card will need to be left still in the machine for a few seconds for the authorization to be completed unlike the quick swipe that we do today.
All chip cards are being shipped with the magnetic strips on the back like we have today. This allows the chip cards to be used in locations that do not have updated pay terminals. In the fall of 2015 we should start to see many merchants with updated equipment as we walk in armed with our new chip-embedded debit and credit cards. If you have an option to choose to use the chip or the swipe method, use the chip method every time for improved security.
With this processing change, we will need to continue to sign for payments based on the merchant’s guidelines. The added chips are not changing this requirement in this phase of the implementation.
Keep and eye on your mailbox and with your favorite stores to see these planned changes come to reality right before your eyes!
That's a lot to absorb. Got questions? Let me know by asking them by using the comments section here!
Carolyn
Cards with chip technology are easily identified by a small gold rectangular raised emblem that appears on the front left side of the card. This chip is located just above the first four numbers of the card.
These cards, when paired with updated terminals in stores can be used to make purchases more securely as the embedded chip generates a unique code for each payment authorization instead of using the number on the card.
Because of the added technology associated with these cards, they are more difficult to duplicate. Those that choose to fraudulently duplicate cards for profit tend to target the older magnetic strip cards for their card theft activities. Using chip cards in countries outside the US has resulted in lowering the number of fraudulent transactions and stolen cards.
Stay tuned to Money reVerse for more about chip cards and new security regulations that will be in effect in October 2015.
Until then, please take about 10 seconds and respond to a Money reVerse Chip Card poll.
Carolyn
