Obama plans to extend overtime to more salaried workers

By Greg Jaffe
June 29 at 10:45 PM - The Washington Post

President Obama said Monday that he wants to require overtime pay for salaried workers who make up to $50,400 a year, a proposal that the White House estimates will cover nearly 5 million workers.

The changes would go into effect in 2016 and would replace current overtime regulations, which require overtime pay for salaried workers making less than $23,660 a year. “Right now too many Americans are working long days for less pay than they deserve,” Obama wrote in a Huffington Post op-ed announcing the proposal. “That’s partly because we’ve failed to update overtime regulations for years.”

The overtime exemption was initially intended for white-collar workers, Obama wrote. Under the current rules, salaried employees — even those with few supervisory duties — can be declared managers and denied overtime if they earn more than the $23,660-a-year threshold.

The new rules will peg the threshold for paying overtime wages to the 40th percentile of income going forward, according to the Associated Press.

Obama cast the new plan as a step toward shrinking the growing income gap between the wealthiest Americans and the middle class, an issue that has drawn concern from Republicans and Democrats.

“Will we accept an economy where only a few of us do exceptionally well?” Obama asked in the article. “Or will we push for an economy where every American who works hard can contribute to and benefit from our success?”

The White House’s proposed changes will be open for public comment and will not be finalized until next year. They can be enacted through regulation, without approval by the Republican-led Congress, the AP said.

“If you’re making $23,000, typically, you’re not high in management,” the president said last year. “If your salary is even a dollar above the current threshold, you may not be guaranteed overtime. It doesn’t matter if what you do is mostly physical work like stocking shelves, it doesn’t matter if you’re working 50 or 60 or 70 hours a week — your employer doesn’t have to pay you a single extra dime.”

Some Republicans have opposed increasing the threshold, saying that it would discourage employers, particularly in the fast-food industry, from creating jobs.

The president has also championed raising the minimum wage to $10.10 an hour, a proposal that has been stymied by Republicans in Congress who have said it would make it harder for young people to land entry-level jobs.

Over the past 63 months, U.S. businesses have created 12.6 million jobs — the longest streak of consecutive monthly job gains on record, according to the White House.

The president is planning to outline his proposal for changing the overtime regulations in a speech in La Crosse, Wis., later this week.