With Obama’s New Overtime Rules, Execs Who Earn $23,660 Annually Will Get A Boost

April 23, 2015  |  

President Obama has been talking about raising wages nationwide. Now it seems he just might do it–in a roundabout way.

Obama’s administration will propose new rules for overtime compensation, which could force more businesses to pay time-and-a-half after 40 hours of work. This move should be welcome news for a lot of lower-level executives. “Many employees now earning as little as $23,660 a year — below the federal poverty line for a family of four — aren’t entitled to overtime pay because they are considered managers,” reports Yahoo.

Obama has been calling for a raise of the minimum wage, but Republicans in Congress have been blocking such proposals. But Obama can actually change the overtime rules through executive authority. Some people want Obama to push the threshold higher before someone could be called an executive exempt from overtime. Officials at the Department of Labor want it lifted to $51,000.  And a group of 26 Democratic Senators want it to be $56,680.

“This is absolutely one of the best practical ways to give people the on-ramp to the middle class,” said lawmaker Sherrod Brown of Ohio. “When you strip people of their overtime pay, which is what’s happened over the years, they really don’t have a chance to get ahead: They’re working harder and harder and not seeing real pay increases.”

Others argue that jobs will be lost as fast-food restaurants, retailers, and other companies may have to cut employment to pay for increased overtime coverage.

Fact is, the middle class is still suffering. Middle class incomes still haven’t bounced back to pre-recession levels. According to inflation-adjusted estimates from Sentier Research, the median U.S. household income of $54,500 in February remained $1,500 short of the December 2007 level, when the recession started.

There could be other changes as well. “Under the Bush administration’s 2004 rules, exempt executives must supervise at least two employees and management must be their primary duty, though there is no requirement covering the amount of time they spend on management tasks,” reports Yahoo. Obama may change this definition of executives.

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