Photograph by Betsie Van Der Meer — Getty Images
By Jaclyn Peiser
August 12, 2015

Overtime can make a big difference for people living paycheck to paycheck. And, according to a new report, a single change to the rules about who’s eligible for overtime pay would expand the number of low-wage workers who qualify for that extra pay by a whopping 5.9 million.

Right now, workers may earn no more than $455 per week (or $23,660 per year) in order to be eligible for overtime. But under the new rule change proposed by the U.S. Department of Labor in July, that threshold would go up to $970 per week or $50,440 per year. According to a new report by the Institute for Women’s Policy Research and MomsRising, the majority of those those newly covered workers would be women.

The report finds that single moms, as well as black and latino women would see the largest benefits—both in terms of the percentage of women gaining OT coverage and the amount that the rule would add to their paychecks.

 

President Obama asked the DOL to update the guidelines for overtime pay last year. However, not everyone is on board. The Chamber of Commerce is opposed to the proposal, saying it will do more harm than good. Some say it would put more restrictions on employers and many small business owners have spoken out saying they can’t afford to pay their workers overtime.

Of the currently exempt female workers who fall under one of these umbrellas, nearly half (3.2 million) would benefit under the new cap. If they exceed a 40-hour work week, single mothers, black women and Hispanic women could earn an additional $243, $244 and $254, respectively, per week.

“We’re showing that these vulnerable groups work more overtime and will get more overtime if their hours are not changed by their employers,” said Heidi Hartmann, the president and CEO of IWPR, on a press call. Even if employers were to cut overtime in reaction to the new rules, Hartmann believes women in these groups would still benefit, since companies would likely hire new staff members to pick up the remaining work.

 

Much of the increased spending in overtime pay would likely end up being injected back into the economy as women spend their salaries to increase their families’ standard of living, said Kristin Rowe-Finkbeiner, president and CEO of MomsRising.org, a nonprofit that advocates for women and mothers. “Overtime pay is one important way to keep [women] out of poverty,” she said.

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