A change to federal wage laws could be particularly painful for technology startups.

On Dec. 1, the federal threshold for overtime will be raised. Most workers who are paid less than $47,476 annually would be paid overtime for any work over 40 hours a week. While there are a number of exemptions to that rule, tech workers are not among them.

Employees of technology startups typically forego a higher wage for a share of ownership in the company. Diana Furchtgott-Roth, a former economist with the U.S. Department of Labor, said the changes could kill innovative companies. “It is really tragic that this sector of the American economy, which has paid off so well for so many people and has been a source of innovation, is going to have to change its rules,” she said. “Some startups have been incredibly successful and made millions for the workers who have been on that first rung of the startup.”

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Aaron Dallek has formed a number of successful startups. He says the new rules will harm his current venture, Opternative, a Chicago-based startup that offers online eye tests and  prescriptions.

"Some of our employees who we have to do this today, don't fully understand why I tell them when their 40 hours are complete that they can't work anymore," Dallek said. "Sometimes they want to continue to work and help the company with their mission, but they don't understand why they can't do that."

The Obama administration says roughly 5 million Americans will be affected by the rule change.


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