White House Planning to Extend Overtime Benefits

President Obama plans to more than double the pay threshold under which workers are entitled to overtime pay.
Matthew HellerJuly 1, 2015

The Obama administration is planning a radical overhaul of overtime regulations that it expects will benefit nearly 5 million workers next year.

Under the new rules, private-sector workers who make up to $50,400 a year will be guaranteed the right to earn additional pay if they work more than 40 hours per week. Currently, only workers who make $23,660 a year, or less than $455 a week, have those same protections.

“We’ve got to keep making sure hard work is rewarded,” President Barack Obama said in a Huffington Post article in which he previewed the changes. “Right now, too many Americans are working long days for less pay than they deserve.”

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Obama noted that “we’ve failed to update overtime regulations for years” and predicted that the new rules will be “good for business owners who are already paying their employees what they deserve — since those who are doing right by their employees are undercut by competitors who aren’t.”

According to The Los Angeles Times, the overtime rules change “is one of the most significant steps the administration can take without congressional action. The Fair Labor Standards Act, passed in 1938, gives the administration broad authority to set the rules without seeking lawmakers’ approval.”

But Republicans are expected to oppose any changes, arguing that they could harm the economic recovery.

Labor advocates have called on the administration to consider raising the threshold to salaries of at least $42,000 per year. They say the higher limit could help stimulate the economy by boosting middle-class workers’ wages or triggering new hiring to prevent the need for paying the higher overtime rate.

“We’ve seen a big push on raising wages at the bottom,” Ken Jacobs, chairman of the University of California Berkeley Center for Labor Research and Education, told The Times. “What this does is it addresses these issues not just for workers at the bottom but for workers in the middle.”

The proposed rules will soon be open to public comment for 60 days. The administration will then issue final rules.