31 Mar 2022


Salary Threshold Legislation Review

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Academic level: University

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With the changes made on the federal annual salary threshold for employees, not every employer is able to meet the increase in salary and thus several challenges may arise in recruitment due to this. In reviewing the direct effect of the company’s inability to increase the pay of its employees, most employers will opt to reduce the number of employees being employed into the company. This is because most people being employed generally earn below threshold salary and work for more than 40 hours thus they qualify for overtime pay. Since the employers will not be able to pay this extra amount, they may decide to reduce the entry-level management positions and retain hourly jobs so as to remain with the maximum number that the company can easily pay without being plunged into bankruptcy or straining to meet other demands of the company (Maurer, 2016).

Another challenge is the death of recruiting exercises as employees will be fired rather than be hired. The increase in labour management costs will result in less people being hired and even lesser people being promoted to managerial positions. This will see to it that most employees lose their exempt-level benefits as there will be a cut in the company’s expenditure.

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According to Maurer (2016), this will also affect seasonal employees and professionals who will not be hired to work permanently in a company. This will impact negatively on recruiting as the department involved will be losing talent rather than using it to improve the company’s services. The salaried employees will also be moved to category of exempt-level so as to cut down on their benefits. In conclusion, there will be negative feedback concerning the recruiting process as companies will restrict the employment process in a bid to reduce overtime pay. 


Maurer, R. (2016). DOL Overtime Rule Will Challenge Recruiting . Society of Human Resource Management. Retrieved from https://www.shrm.org/resourcesandtools/hr-topics/talent-acquisition/pages/dol-overtime-rule-challenge-recruiting.aspx

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StudyBounty. (2023, September 14). Salary Threshold Legislation Review.


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