Yesterday, President Obama announced a rule change that will expand time-and-half eligibility to around 5 million Americans. By raising the overtime threshold from $23,660 a year to $50,440, the president will grant overtime to workers who were previously ineligible for overtime pay, despite earning low wages and working more than 40 hours a week.
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“Right now, too many Americans are working long days for less pay than they deserve,” Obama wrote in an op-ed in The Huffington Post. “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.”
The change is expected to be complete in 2016, and would likely make a big impact on the lives of affected workers. Currently, for example, a manager at a big-box store or a fast food restaurant might make what appears to be a reasonable salary … until their paychecks are calculated against the amount of unpaid overtime they’re forced to put in as a condition of their “managerial” job.
Noam Scheiber at The New York Times points out that the president has the power to make this rule change on his own, without congressional approval, but that it’s possible that congressional Republicans could undo the regulation by attaching a rider to appropriations later this year.
Critics of the regulatory change claim that an increase in overtime equals an increase in employers’ costs, which affects their bottom line and potentially, job growth. But, proponents see an opportunity for growth for the middle class, which is still lagging in the recovery from the recession.
“I can’t think of any other rule change or executive order that would lift more middle-class workers,” former White House economist Jared Bernstein tells The New York Times.
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