The liberal Economic Policy Institute estimates that 4.9 million people will become newly eligible for overtime, slightly more than the government’s figure, and that an additional 7.6 million will benefit because they have previously been denied overtime pay as white collar workers.
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“Either way, the worker wins”, said Vice President Joe Biden on a conference call with reporters Tuesday afternoon.
In restaurants, retail stores and other small businesses, employees designated as managers often work up to 80 hours a week – but do not qualify for overtime.
Miller says some businesses may try to get out of paying overtime by raising employee salaries above the threshold, but he says that’s a win for employees too.
Currently, such workers earning less than $23,660 per year ($455 per week) are eligible for overtime pay. They will make more money, but won’t qualify for overtime pay. The final rule does not make any changes to the duties test for executive, administrative and professional employees.
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.
“When they have you on salary, it’s because they need someone there and you’re sort of expected to put more than 40 hours in”.
But critics said the measure would undermine the morale of salaried employees by requiring them to account for every hour of their workdays.
According to information released by the White House this week, the 4.2 million people who will be affected by this change are expected to earn an additional $12 billion over the next decade. The U.S. Labor Department finalized new rules Wednesday that go into effect in December.
“What our members have told us, what many other employers have told us, is there’s not a golden pot of money out there sitting in employers’ pockets where they can all of a sudden pay a lot more overtime pay”, said David French, vice president of the National Retail Federation. But if they make under $47,500 a year, it’s going to come out of the owners bottom dollar, which will cause a ripple effect.
“Any people categorized as a salary employee and that those salary employees were taken advantage of”, said Mehner.
Q: Does this mean I will have to punch a time clock and get paid hourly?
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The Department of Labor announced today that overtime threshold will be raised to $47,476.
