At its Bloomington headquarters, Stone Belt offers direct support to people with developmental disabilities. From art classes to mental health services, Stone Belt's employees are there to assist. The company's 500 employees are dedicated to helping people improve their lives.
President Obama unveiled new rules last week that govern exempt positions for overtime pay. This means more employees including about 20 percent of the workers here at Stonebelt, are eligible for overtime pay. It's a move some think could provide better wages and more time off for mid-level managers.
But when Stone Belt's CEO Leslie Green heard about the change, she wasn't sure how the company would pay for the overtime.
"We don't control what we're paid to provide the services. It's all set by the state and federal government. The allocation that we get and the way that we're paid. So unlike a private business, we can't just raise our prices to accommodate the increases in salaries," says Green.
Under the final version of the rules, salaried employees making less than $47,476 a year will earn time and a half for working overtime. That's almost double the previous threshold.
Maurer School of Law Labor and Employment Professor Kenneth Dau-Schmidt says these updates are good.
"And so as the rule currently exists you could pay an executive employee, lower than the poverty line and work them as many hours as you wanted to, and be in compliance with a federal act that's supposed to make wages fair. That doesn't sound like the current rule complies with the intent of the law," says Dau-Schmidt.
How will companies pay for more overtime?
Dau-Schmidt says there are 3 ways companies can address the new threshold:
Increase wages above the threshold and maintain exempt positions
Set a salaries for hourly workers that includes some overtime but remains below the threshold
Reorganize the company and create more jobs
The idea is that workers can spend more time with their families or make more money and employers can provide higher wages or create more positions. But some don't expect it to play out this way.
"If you're only making x amount of money and you only have x the money to pay back, you have to find a way to work within that box," says Chris Schrader of the Indiana University School of Public and Environmental Affairs. "I really genuinely do not expect to see the money to move in either direction. Some people might make a little bit more, but that'll be about it. And then businesses will figure out how many hours they can afford to work people and at what rate."
Some people might make a little bit more, but that'll be about it.
But for a company like Stone Belt, the questions is: where will the funds come from?
"Not for profits are the ones in the worst spot because they can't launch a new product line. They can't go out and change their pricing. They mostly get reimbursed on fixed schedules. So they don't really have a path- an easy path, let's put it that way," says Schrader.
Green says that Stone Belt has about 100 or 150 employees that are in exempt positions. And she's not sure how the company will address their roles.
Who is impacted the most by the new regulations?
The ones that may be most affected are what Green calls front-line managers and coordinators. They're working with the staff who provides direct support, and they're providing some direct support themselves.
"As I've said, we've known about it for a while and we've been evaluating how it might affect us, but in the end, I don't think we'll know until we just start it, and then we'll probably have to, you know, figure out what we can do from that point forward," says Green. "They're in the worst spot because the only way to drive those wages up is to spend more money, and more money spent inside means less money for whoever it is they're helping."
But Green recognizes that this could have a positive impact on her employees.
"So it moves us in the direction we'd like to go, it just hasn't currently given us the resources to do that. That's our next task, to get those resources in place," says Green.
 Professor Dau-Schmidt ran some numbers for us. He said the overtime exemption threshold was introduced in 1975 around $13,000. Adjusted for inflation, that number would be around $58,000 today.
Another part of the new provisions sees that the threshold will be reviewed and updated in 3 years.
