“Too Many Americans Are Working Long Days For Less Pay”: Obama To Lower Overtime Salary Threshold

July 1, 2015  |  

In a Huffington Post piece, President Barack Obama announced a new regulation that will extend overtime pay to nearly five million more Americans.

As the law currently stands, employees earning $50,440 or more qualify for time-and-a-half overtime wages. But with the new sweeping changes, which Obama will officially announce on a trip to Wisconsin, the threshold will be lowered to $23,660.

“We’ve got to keep making sure hard work is rewarded. Right now, too many Americans are working long days for less pay than they deserve. That’s partly because we’ve failed to update overtime regulations for years — and an exemption meant for highly paid, white collar employees now leaves out workers making as little as $23,660 a year — no matter how many hours they work,” Obama wrote for HuffPo.

The administration has the authority to implement the new rule, without congressional approval, that will “restore the overtime salary threshold to roughly where it stood in 1975 in terms of purchasing power,” The New York Times added.

The President was praised by supporters who pushed for overtime pay expansion.

“The president said he wanted to go big here and he did,” said Jared Bernstein, a ex-White House economist who co-authored an influential paper on the advantages of widening overtime pay. “I can’t think of any other rule change or executive order that would lift more middle-class workers.”

Right-leaning politicians and business groups, on the other hand, are perturbed by Obama’s new rule change. The National Retail Federation, for example, argued that the sweeping changes will threaten job growth.

“NRF believes the proposal would limit career opportunities by ‘turning managers into rank-and-file hourly workers,’ the trade group wrote. “Overtime expansion would […] add to employers’ costs, undermine customer service, hinder productivity, generate more litigation opportunities for trial lawyers and ultimately harm job creation.”

As per Obama’s HuffPo post, he disagrees.

“…It’s good for business owners who are already paying their employees what they deserve — since those who are doing right by their employees are undercut by competitors who aren’t,” he said.

This is a policy that could not only benefit low-wage workers with families, but those young people who are saving for things like college or a car. Your thoughts?

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