An NRO editorial reports on the administration’s attempt to extend overtime rules to salaried employees:
The Obama administration wants to raise that threshold to as high as $50,400, meaning that office managers salaried at around $1,000 a week would be treated like minimum-wage fast-food workers in the event — the very likely event — that they clock 41 hours in a week.
This could have a big impact on accounting firms. The “busy season” in public accounting is aptly named. Accounts typically work 60 plus hours during the busy season from January to April 15 (with some variation by speciality) and less during the rest of the year but they typically average over 40 hours for the year. The 3000 hour club is less common than it was. The most recent average entry-level salary for accountants was $43,544 at our school. That means that the majority of the new hires would fall under the new rules.
What will firms do to adjust? Increase cash wages and reduce benefits or increase expected hours? Reduce hiring? We are investigating. Update: this will punish small accounting firms but the current entry-level salary for the larger firms will allow them to escape this.