Obama to make millions more Americans eligible for overtime pay

June 30, 2015, 12:11 PM UTC

If you earn a salary, you probably don’t expect to make any overtime wages on top of it. But federal law does protect salaried workers from being taken advantage of by their employers: protections exist that require employers to pay their salaried workers time-and-a-half when they work over 40 hours. The problem is, those protections only cover Americans making $23,660 a year, or less.

In an op-ed Monday night in the Huffington Post, President Barack Obama called for an overhaul of overtime regulations so that millions more Americans can be eligible to receive time-and-a-half pay for overtime hours. He proposed bumping the ceiling to $50,440 — equal to the 1975 cap in terms of purchasing power. That means, if the rule passes, salaried workers making below the new threshold would automatically be paid overtime wages when they work more than 40 hours each week.

The White House says it expects 5 million Americans to benefit from the rule change: “That’s good for workers who want fair pay, and it’s good for business owners who are already paying their employees what they deserve — since those who are doing right by their employees are undercut by competitors who aren’t,” Obama wrote.

The proposed rule is designed to combat income inequality, in part stemming from wage stagnation even as Americans work longer, more productive hours. With the threshold as low as it is, even some Americans who are below the poverty line are not guaranteed overtime pay for extra hours worked, according to the Economic Policy Institute. By raising the cap, lower-paid, white-collar workers — such as customer service representatives, social workers, and retail sales workers — would be able to earn money in exchange for overtime hours.

The rule is likely to be completed in 2016, although it could still be challenged in court, or in Congress.

Read More

Great ResignationDiversity and InclusionCompensationCEO DailyCFO DailyModern Board