Currently, employers are not required to pay overtime to certainmanagers and administrators if they work over 40 hours a week, aslong as the employers classify these managers and administrators assalaried employees, and as long as these managers andadministrators make more than $23,660 per year - about $455 perweek.

That is likely all about to change, though. The ObamaAdministration is proposing a rule that would more than double thatwage floor to $50,444. In other words, any employee currentlyclassified as a manager or administrator and being paid on salary(exempt from overtime), would now need to be paid a minimum of$50,444 a year in order to remain classified as salaried.

Any manager or administrator on salary earning less than $50,444a year would be required to be recategorized as non-exempt, meaningthat employers would be required to pay overtime to those employeesfor anything over 40 hours per week.

The proposed rule would thus affect millions of workers withmanagerial or administrative duties who currently make between$23,661 and $50,443, and who are currently salaried and exempt fromovertime.

In specific, the Department of Labor estimates that 4.6 millionemployees would be affected. However, other organizations, such asthe Economic Policy Institute, estimate as many as 15 million.

While larger companies tend to properly classify their workersfrom the start, smaller companies, since they rarely have HRdepartments with experienced specialists, are more likely tomisclassify them.

Still, one of the biggest effects of the proposed rule will beon companies that have properly classified employees as exempt, butpay them less than the proposed threshold of $50,444. The optionsare to reclassify them as hourly (and pay the required overtime forwork over 40 hours a week) or increase their salaries to $50,444 ormore in order to maintain the exemption.

Since it is unlikely that employers paying salaried workers,say, $30,000 or $40,000 a year are going to increase their salariesto $50,444, it is more likely that these employers will convertthese salaried employees to hourly workers.

"Most workers would be unlikely to see an increase in take-homepay, the use of part-time workers could increase, and retailersoperating in rural states could see a disproportionate impact."said the National Retail Federation (NRF) in a press release.

The problems in specific? Certainly, there would be problems foremployers having to pay the extra overtime (discussed below).However, there would be problems for the employees who are beingreclassified.

For one, the shift from salaried to hourly could remove theseemployees from career tracks that they consider important to theirfutures. That is, employers might centralize oversightresponsibilities with higher-level managers, thus cutting down onthe number of pathways for lower-level managers to advance theircareers. "Promoting someone to manager is going to be an expensiveproposition for many small businesses, and the result will be lessmobility and fewer opportunities for workers at the bottom," saidBeth Milito, senior legal counsel for the National Federation ofIndependent Business.

A second problem for employees is that, with employers beingrequired to pay overtime for over 40 hours a week, the employersmight consider reducing benefits packages for these workers as away to compensate for the extra dollars they will be required topay in overtime wages.

"Many reclassified employees will lose benefits, flexibility,status, and opportunities for advancement," said Randy Johnson,senior vice president of Labor, Immigration, and Employee Benefitsfor the U.S. Chamber of Commerce. "This change is another exampleof the Administration being completely divorced from reality andadding more burdens to employers and expecting them to jut absorbthe impact."

What are the problems for employers themselves? "Overtimeexpansion would drive up retailers' payroll costs while limitingopportunities to move up into management," said David French,senior vice president of government relations for the NRF, in thepress release. "The administration seems to be under the distortedimpression that they can build the middle class by governmentmandate. There simply isn't any magic pot of money that letsemployers pay more just because the government says so."

Ted Pitts, president and CEO of the South Carolina Chamber ofCommerce, quoted in an article in The Herald newspaper (Rock Hill,S.C.), said the proposed regulations will increase costs forbusiness. "Government-mandated wage increases force employers tomake adjustments for added costs to conduct business, such asreducing hiring, cutting hours, reducing benefits, and/orincreasing prices for goods," he said.

As to the status of the proposed rule, the Administration canenact the rule through regulation. However, the Republican-runCongress can also seek to counter it through legislation. At thispoint, the rule will not take effect until after a 60-day commentperiod. "It is very difficult to stop a regulatory change, short ofa statutory amendment," said Lisa A. Schreter, co-chair of the wageand hour group at the law firm of Littler Mendelson, in aninterview with the Albuquerque Journal.

If nothing changes, the Department of Labor expects the finalrule to go into effect in 2016.