By — Kristen Doerer Kristen Doerer Leave your feedback Share Copy URL https://www.pbs.org/newshour/economy/obama-administration-extends-overtime-protections-to-4-2-million-workers Email Facebook Twitter LinkedIn Pinterest Tumblr Share on Facebook Share on Twitter Obama administration extends overtime protections to 4.2 million workers Economy May 17, 2016 8:00 PM EDT If you’re a salaried employee who makes under $47,476 a year, you will now be paid time and a half for every hour you work over 40 hours a week. Vice President Joe Biden and Secretary of Labor Thomas Perez unveiled the finalized overtime rules during a press call Tuesday. The new overtime threshold for salaried employees will be set at $47,476 and will take effect on Dec. 1, 2016. Under the regulation the threshold will be updated every three years. Biden will announce the changes tomorrow in Columbus, Ohio. The administration estimates 4.2 million workers will benefit from the new rule’s overtime protections, because they will either be paid more or get to spend more time with their families. Today, the average full-time American worker works 47 hours a week, according to a Gallup study from 2014. “If you work overtime, you should actually get paid for working overtime,” said Biden. Currently, if you make under $23,660, you are automatically eligible for overtime pay. But that number hasn’t changed all that much in 40 years. READ MORE: Are bosses cheating workers out of overtime? “In 1975, 62 percent of workers automatically qualified for overtime. Today, that’s 7 percent,” said Biden. The new rule brings the salary threshold close to where it would be had the overtime threshold of 1975 been indexed to inflation. With the new changes, the White House estimates that 35 percent of full-time salary workers will be below the threshold and thus eligible for overtime pay. WATCH: Last summer, economics correspondent Paul Solman explored the overtime rules before the administration revamped them. “Companies are going to be faced with a choice,” said Biden. “Either they pay their workers overtime… or they cap their salaried workers [who make] below $47,500 … at 40 hours.” Businesses and groups, like the National Retail Federation, oppose the new regulation. On the organization’s website, Senior Vice President David French writes, “…the rules will cost businesses millions of dollars in administrative costs while giving few workers an actual increase in take-home pay.” But Secretary Perez said the Department of Labor has listened to critics and made some changes accordingly. “For instance, the business community overwhelming said do not to touch the duties test, so we didn’t,” said Perez. The duties test determines which workers who make above the salary threshold are exempt from overtime. The Department of Labor also lowered the proposed salaried threshold from $50,440 to the $47,476. READ MORE: A lawyer and her client weigh in on the overtime scam Overtime regulations were first established in 1938 under the Fair Labor Standards Act. “It was meant to address both the question of [the] underpaid and overworked by setting a wage floor and an hour ceiling. In so doing, the Fair Labor Standards Act was the crown jewel of worker protection and helped build the middle class,” said Perez. That crown jewel, however, “has lost its luster.” The administration believes the updated overtime regulation will return some of that luster and boost the middle class. “The American people want to work,” said Biden. “All they want is a fair shot.” By — Kristen Doerer Kristen Doerer Kristen Doerer is the digital reporter-producer for PBS NewsHour’s Making Sen$e. @k2doe
If you’re a salaried employee who makes under $47,476 a year, you will now be paid time and a half for every hour you work over 40 hours a week. Vice President Joe Biden and Secretary of Labor Thomas Perez unveiled the finalized overtime rules during a press call Tuesday. The new overtime threshold for salaried employees will be set at $47,476 and will take effect on Dec. 1, 2016. Under the regulation the threshold will be updated every three years. Biden will announce the changes tomorrow in Columbus, Ohio. The administration estimates 4.2 million workers will benefit from the new rule’s overtime protections, because they will either be paid more or get to spend more time with their families. Today, the average full-time American worker works 47 hours a week, according to a Gallup study from 2014. “If you work overtime, you should actually get paid for working overtime,” said Biden. Currently, if you make under $23,660, you are automatically eligible for overtime pay. But that number hasn’t changed all that much in 40 years. READ MORE: Are bosses cheating workers out of overtime? “In 1975, 62 percent of workers automatically qualified for overtime. Today, that’s 7 percent,” said Biden. The new rule brings the salary threshold close to where it would be had the overtime threshold of 1975 been indexed to inflation. With the new changes, the White House estimates that 35 percent of full-time salary workers will be below the threshold and thus eligible for overtime pay. WATCH: Last summer, economics correspondent Paul Solman explored the overtime rules before the administration revamped them. “Companies are going to be faced with a choice,” said Biden. “Either they pay their workers overtime… or they cap their salaried workers [who make] below $47,500 … at 40 hours.” Businesses and groups, like the National Retail Federation, oppose the new regulation. On the organization’s website, Senior Vice President David French writes, “…the rules will cost businesses millions of dollars in administrative costs while giving few workers an actual increase in take-home pay.” But Secretary Perez said the Department of Labor has listened to critics and made some changes accordingly. “For instance, the business community overwhelming said do not to touch the duties test, so we didn’t,” said Perez. The duties test determines which workers who make above the salary threshold are exempt from overtime. The Department of Labor also lowered the proposed salaried threshold from $50,440 to the $47,476. READ MORE: A lawyer and her client weigh in on the overtime scam Overtime regulations were first established in 1938 under the Fair Labor Standards Act. “It was meant to address both the question of [the] underpaid and overworked by setting a wage floor and an hour ceiling. In so doing, the Fair Labor Standards Act was the crown jewel of worker protection and helped build the middle class,” said Perez. That crown jewel, however, “has lost its luster.” The administration believes the updated overtime regulation will return some of that luster and boost the middle class. “The American people want to work,” said Biden. “All they want is a fair shot.”