Locals react to Obama administration’s raise of minimum OT threshold

The Obama administration estimates the change in overtime rules will raise US wages by approximately $12 billion over the next decade, or an average of $1.2 billion a year.

The last time sweeping changes were made to the nation’s overtime pay rules was in 2004.

However, he added, “Now, the counter to that is that the Department of Labor believes that that will cause employers to identify that overtime, cap the overtime, for which the employee’s not being paid anything more, and then push that work to additional employees”.

Prior to this announcement, only seven percent of salaried Americans were receiving overtime pay when they worked extra hours. The threshold was last updated in 2004 after nearly 30 years without an increase, and the Obama administration says inflation has been cutting into the real value of that threshold. At the same time, the new protections will come at minimal cost to the business community. “We have a situation where you can work 70 hours a week and literally make the poverty wage of $24,000 dollars, which is the current threshold”.

The move addresses a decades-long trend of businesses requiring 50- and 60-hour weeks of a growing body of workers classified as managers and supervisors but paid barely more than those on hourly wages.

But will workers end up with more money, or fewer hours?

The Pennsylvania Department of Labor and Industry says 185,000 workers in the state will now be eligible for time and a half for working more than 40 hours a week.

Senator Mike Enzi (R) is of like mind, saying, “This rule is just another example of this Administration’s inability to understand that one-size-fits-all regulations don’t work”, Enzi said. David French of the National Retail Federation calls it a career killer. The policy changes are meant to counter erosion in overtime protections, which date from the 1930s and require employers to pay 1 ½ times a worker’s regular salary for any work past 40 hours a week. Right now only salaried employees making less than $23,660 can receive overtime pay. “Either way, they win”, Obama said.

“This has been on the radar of most employers, at least the clients that we work with are aware of it and been planning for this”.

Determine which employee salaries you can raise to retain exempt status and which you can’t based on your company’s labor budget.