Obama Announces Change to Overtime Rule

Thursday, July 02, 2015 Written by 
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Employers will no longer be able to bypass overtime pay for low-wage earners, thanks to new labor

regulations.  President Barack Obama announced new rules on Monday that will require businesses

to pay millions of additional American workers overtime wages.

 

"In this country, a hard day's work deserves a fair day's pay," Obama wrote in an op-ed for 

The Huffington Post.  "That's at the heart of what it means to be middle class in America."

 

Obama first proposed the overtime change last March.  However, the Labor Department missed its

deadline. The long-awaited regulation would make all salaried workers who earn less than $970

per week, roughly $50,440 per year, automatically eligible to earn overtime pay if they work more

than 40 hours a week. The cutoff under existing rules is around $23,660 per year.

 

The move could raise pay for nearly 5 million American workers and is a central part of a White

House push launched last year to reduce income inequality.

 

The American Federation of Teachers welcomed the Department of Labor’s long-overdue proposal

to change the overtime rule to include millions more American workers. “Overtime pay is a basic

workplace right that should be afforded to all employees,” the organization said in a statement. 

 

“By raising the threshold beyond the current cutoff of $455 a week, millions of Americans will once

 again have their time above and beyond their regular work hours recognized. At the same time,

the new rule provides a disincentive to squeezing current employees to work more or to work in

hospitable hours.”

The new rules will be subject to a public comment period and could take effect in 2016.

Business groups and Republicans in Congress, though, oppose the change. GOP members of

the House Education and Workforce Committee held a hearing earlier this month to blast the rules. 

 

But the president has the backing of Democrats and labor unions, who have urged the

administration to raise the overtime threshold as high as it can.

 

 

 

 

 

 

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