It’s being called one of the most ambitious economic reforms of the Obama administration – the Labor Department announced today that overtime protection and pay will be extended to millions of additional salaried workers.
Advertisement
President Barack Obama’s rule that extends overtime pay to lower-middle class workers will benefit tens of thousands of New Yorkers, according to elected officials.
To break it down by your weekly payments, the rule increases the salary threshold to salaried workers entitled to overtime from the current $455 per week (or $23,660 for a full-year worker) to $913 per week (or $47,476 for a full-year worker). The new policy raises that threshold to $47,476, affecting some 4.2 million people.
The administration noted that employers could mitigate the effect of the rule by, among other things, raising salaries above the new threshold or limiting hours to 40 per week. “With the stroke of a pen, the Labor Department is demoting millions of workers”, David French, a senior vice president for the National Retail Federation, said in a statement.
“You’re deprived your dignity, in my view, when you know you’re working much, much harder and much, much longer than you’re compensated for”, Biden said. “So if your business plan was to have a lot of people working 16 hour days, you probably hadn’t thought out how your business was supposed to actually operate”, says Floss. Not changed in the DOL’s rules revision: the duties test that determines exemption from overtime pay for executive, administrative, learned professional, computer and outside sales employees.
But some may still end up logging long hours for the same pay if their employers adjust their hourly rate lower to offset any overtime pay they’ll be owed. So who are these workers?
Q. Will managers at fast-food restaurants and retail chains who earn, say, $35,000 a year and frequently work 50 or 60 hours a week now be paid for all that extra time? Perez says the rule will collectively raise workers’ pay by $1.2 billion a year, though that is just a fraction of the $8 trillion in wages and salaries Americans will collectively receive this year. The Labor Department will now update the overtime salary threshold every three years to ensure that it is takes into consideration the inflation in the country.
Now that she’s a business owner, Barnett says she has to think about what that new law will cost her.
“So, we have some choices”, said Feick.
Advertisement
“Employers need to do a cost-benefit analysis”, Korn said, adding that doing so will allow employers to figure out future costs.
