WASHINGTON -- President Obama last week proposed a new overtime policy that would guarantee overtime pay to most salaried workers earning less than $50,440 next year, up from the current threshold of $23,660.
He touted that new policy in a speech delivered ahead of the Independence day holiday in La Crosse, Wis.
“President Obama has been working hard all week to sell this new proposal," National Retail Federation (NRF) senior vice president for government relations David French said, responding to Obama’s remarks. "The irony is that if he came under the new overtime rules he would have already hit 40 hours by now and his boss would have told him to clock out with the job half-done. We think managers are professionals who should be able to make their own decisions. This plan isn’t about expanding the middle class--it’s about turning salaried professionals into clock-watchers. Retailers believe careers are the path to success, not time clocks.”
The new policy is "going to give as many as five million Americans … the overtime protections they deserve," the president said.
But that doesn’t mean five million people will get a raise, according to a Politico report.
The U.S. Department of Labor estimates that only about one-fifth as many, 1.2 million, will actually see a pay hike. The rest of these newly eligible salaried workers won’t, because their employers will reduce their hours to 40 hours per week so they don’t have to pay time-and-a-half.
Neil Trautwein, vice president of health care policy at the NRF, told the news outlet that even 1.2 million probably overstates how many people will get raises. Limiting hours worked is “something that employers, retailers included, are quite likely to pursue,” Trautwein said, “given the new regulations.”
The overtime rule will increase wages in three ways, Ross Eisenbrey, vice president of the Economic Policy Institute (EPI), told Politico. Some workers will get time-and-a-half for working nights or weekends, where previously they did not. Others will have their salaries raised above the $50,440 threshold so that their employers don’t have to pay them overtime. And still others—part-time workers—will get full-time work, or close to it, to absorb duties that, if assigned to another worker, would require that worker to be paid the overtime rate.
“Figuring out what the balance is, is a hard thing to estimate,” Eisenbrey told the publication.
Click here to view the U.S. Department of Labor page on overtime.
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