A proposed new rule governing overtime pay will mean bigger paychecks for up to 5 million workers, Obama administration officials announced Tuesday. In Louisiana, roughly 70,000 workers would become eligible for overtime under the expansion.
As USA Today reports, the change “goes to the heart of what it means to be middle class in America,” according to Labor Secretary Thomas Perez. But business groups and congressional Republicans say the proposal would force employers to reduce overtime hours and perhaps cut the number of workers.
“Overtime expansion would drive up retailers’ payroll costs while limiting opportunities to move up into management,” reads a statement from the National Retail Federation.
Currently, certain salaried workers who make more than $23,660 cannot claim overtime. The proposed rule would raise that threshold to $50,440 per year for those workers now exempt from overtime benefits.
“Right now, too many Americans are working long days for less pay than they deserve,” President Barack Obama writes in an op-ed for The Huffington Post. “That’s partly because we’ve failed to update overtime regulations for years.”
While many workers already qualify for overtime, some salaried workers who make more than $23,660 a year are exempted because they are designated as management or administrative personnel.
Business groups are poised to fight the expansion of overtime rules, saying they will be forced to cut back on workers’ hours, or workers period.
In his op-ed, Obama says most businesses would benefit because “those who are doing right by their employees are undercut by competitors who aren’t.”
Obama plans to discuss the new overtime proposal in detail during an event Thursday in Wisconsin. It could take months to finalize the proposed rule, which is now subject to a 60-day public comment period.
