Proposed federal changes to how employers pay salaried versus hourly workers could cost state taxpayers nearly $14 million million a year, according to the state's Legislative Fiscal Bureau.
The Fair Labor Standards Act requires employers to pay overtime for employees who work more than 40 hours per week. But some employees can be classified as salaried if they make $23,660 annually. The U.S. Labor Department's proposed rule change would raise that threshold to $50,440.
Among Wisconsin state employees, excluding University of Wisconsin, legislative and court employees, changing the threshold would result in 1,923 full- and part-time employees moving from salaried positions to hourly, according to an LFB analysis requested by Rep. David Steffen, R-Howard.
To cover overtime costs, the state's personnel office estimated an additional $11.8 million per year, or about 0.64 percent of state agency payroll. Providing raises to the salaried employees so they would still be exempt from overtime rules would cost $13.7 million.