“President Obama directed the Department of Labor a year ago to issue regulations and a final rule, as it’s called, to the Fair Labor Standards Act, the FLSA, dealing with overtime for salaried employees below a certain threshold”, Sherrill explained.
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The rule now states that employees who earn $47,476 per year are eligible as hourly employees rather than salary and will be paid overtime compensation for hours worked over the 40-hour limit. They also contend that many small businesses can’t afford either to raise managers’ salaries above the new threshold or pay them overtime.
– A move by the Obama administration is set to raise the salary threshold for those eligible for overtime pay from ,600 to ,476. Inflation and regulatory changes under the George W. Bush Administration eroded that protection, and today, only about 7 percent of salaried workers receive time and a half when they work extra hours.
Analysts say that erosion has contributed to stagnation of wages for lower- and middle-class workers nationally, and shrinking of middle class. While the regime hailed the expansion of overtime as “the worker wins”, it has irked business groups.
Critics of the new overtime rules say fewer employees will have a path to becoming managers and advancing in their companies, and businesses will be forced to limit people to 40 hours a week and hire part-time employees to pick up the slack.
“We have a situation where you can work 70 hours a week and literally make the poverty wage of $24,000 which is the current threshold”. Even if you become eligible for overtime, you may still end up working long hours but not get paid a dime more, because your employer could lower your base hourly pay to offset any overtime you’ll be owed. “They’re working overtime, and they’re not being paid for that now”, said Sara Goulet, communications director for the PA Department of Labor and Industry. He said the new overtime policy is overdue.
Critics are urging Congress to block the new rule, but any such push would face a certain veto by President Obama. “We are committed to fighting this rule and the many others that would be an absolute disaster for our economy”, he said.
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The new rule would cover about 4.2 million people, about 35 percent of all salaried workers, according to the Labor Department. “Or, are you just going to pay overtime on an hourly basis?”
