Washington Post: Millions more workers will be eligible for
overtime pay under new federal rule
By Jonnelle Marte May 18, 2016 https://www.washingtonpost.com/news/get-there/wp/2016/05/17/millions-more-workers-would-be-eligible-for-overtime-pay-under-new-federal-rule/?wpisrc=al_alert-COMBO-economy%252Bnation
Labor Secretary Thomas Perez and President Obama will
announce a new rule Wednesday that will expand the number of workers eligible
for overtime pay. (Andrew Harrer/Bloomberg)
The Obama administration unveiled a new rule Wednesday that
will make millions of middle-income workers eligible for overtime pay, a move
that delivers a long-sought victory for labor groups.
The regulations, which were last updated more than a decade
ago, would let full-time salaried employees earn overtime if they make up to
$47,476 a year, more than double the current threshold of $23,660 a year. The
Labor Department estimates that the rule would boost the pay of 4.2 million
additional workers.
The change is scheduled to take effect Dec. 1.
The move caps a long-running effort by the Obama
administration to aid low- and middle-income workers whose paychecks have not
budged much in the last few decades, even as the top earners in America have
seen their compensation soar. The last update to the rules came in 2004, and
Wednesday’s announcement is the third update to the salary threshold for
overtime regulations in 40 years.
“Along with health care reform, this is one of the most
important measures that the Obama administration has implemented to help
middle-wage workers,” said Jared Bernstein, a former chief economist for Vice
President Biden and a senior fellow at the Center on Budget and Policy
Priorities.
The Obama administration will unveil a new rule that would
make millions of middle-income workers eligible for overtime pay. Here's what
you need to know about it. (Monica Akhtar/The Washington Post)
About 35 percent of full-time salaried employees will be
eligible for time and a half when they work extra hours under the new rule, up
significantly from the 7 percent who qualify under the current threshold,
according to the Labor Department.
The shift was swiftly criticized by small business owners,
nonprofit groups, and universities that say they may have to switch some
salaried workers to hourly positions to afford the new threshold. And instead
of seeing bigger paychecks, some salaried workers may be assigned fewer hours,
they said.
“For many of these types of employees they’re going to be
viewing it as a demotion,” said David French, senior vice president of
government relations for the National Retail Federation. “They’re going to have
to clock in and clock out. They’re no longer going to have flexibility at
work.”
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