Photo: Walmart
Walmart announced earlier this week that it has raised the starting wage it pays entry-level store managers from to $48,500 from $47,476 a year. The move was widely seen as the retailer seeking to get around new federal labor regulations that go into effect on Dec. 1, which will require companies to pay overtime to salaried workers earning less than $47,500 annually.
Earlier this year, Walmart increased its starting wage for hourly employees to $10 as part of a plan to invest $2.7 billion in worker pay and training over the next two years. The retailer, which had increased it starting wage to $9 a year before, has previously credited higher pay for reductions in employee turnover and shrink.
Under current regulations, employers only need to pay overtime to salaried workers making less than $23,660 a year. In 1975, 62 percent of salaried workers were eligible for overtime pay. Under current rules adopted in 2004, only seven percent are eligible, Reuters reports.
The new rules are expected to affect more than four million workers, many in lower wage industries such as retail. Speculation is that companies may transition some salaried workers to hourly positions or set hard cutoffs to avoid paying overtime.
Earlier this year, the National Retail Federation called the new rules “a career killer” for retail workers as retailers operating in small towns across the U.S. will be expected to match wages paid in markets with higher expenses, such as the New York metro area.