The Obama administration could raise the salary level for overtime pay, which would impact millions of Americans.
Currently, the overtime threshold is $23,660, but according to Politico, it could be raised to an amount between $45,000 to $52,000. Currently, the law only requires that salaried employees who make $23,660 or less receive 1.5 times their normal wage for every hour they work after 40 hours a week.
If President Barack Obama increases the salary level for overtime pay, it would put more money in the pockets of 5 to 10 million Americans, according to the Economic Policy institute.
The current rule covers 12 percent of salaried workers and white-collar jobs are exempt, although many low wage workers are exempt because they have “supervisor” roles, reports International Business Times.
“It’s hard to believe that somebody making $30,000 is a supervisor,” Daniel Hamermesh, an economist at the University of Texas at Austin, told Politico. “At this point, I don’t think even our regulations are in line with the original intent of the law.”
As the economy has shifted from production-based to service-based, workers who have managerial titles who may have a difficult time making enough money to survive under current laws.
Obama wouldn’t need congressional approval to make the change, but that doesn’t mean Republicans are happy. The GOP and businesses have protested that it would would force them to eliminate jobs and cut hours for salaried employees. The House Education and the Workforce subcommittee plan to discuss the federal wage on June 10.
“The minimum wage they can’t do,” Bill Samuel, director of legislative affairs for the AFL-CIO, told Politico. “This is probably the most significant step they can take to raise wages for millions of workers.”
Aloysius Hogan, a senior fellow at the conservative Competitive Enterprise Institute, said businesses will have to lay off well-paid executives and replace them with lower-paid workers.
The National Retail Federation said the same thing — its senior vice president for Governor Relations David French said the new rule would “hollow out middle-management careers and middle-class opportunities for millions of workers.”
The move follows a series of policy changes in several states to increase the minimum wage in hopes of closing the wage gap.
Image via Maryland GovPics/Flickr