President Barack Obama on Tuesday announced a sweeping change to the country's overtime pay law by expanding the measure to almost 5 million workers as early as 2016.
Currently, employees who earn more than $23,660 per year ($455 per week) cannot claim overtime pay. Unless exempt, employees covered by the Fair Labor Standards Act must receive overtime pay for hours in a week that exceed 40.
But the long-awaited proposed rule will increase the threshold for guaranteed overtime for employees who make less than an estimated $50,440 next year, according to the White House. The salary threshold, only updated once since the 1970s, guarantees overtime for most salaried workers who fall below it, but it is destroyed by inflation every year.
Last March, Obama ordered the U.S. Department of Labor to streamline and simplify federal overtime rules, and draft a version of regulations that could expand the number of workers covered by overtime.
"If you go above and beyond to help your employer and your economy succeed, then you should share a little bit in that success," he said in a speechlast year.
The National Retail Federation opposes overtime expansion. The change "would drive up retailers’ payroll costs while limiting opportunities to move up into management. Most workers would be unlikely to see an increase in take-home pay, the use of part-time workers could increase, and retailers operating in rural states could see a disproportionate impact," according to a study outlined on the group's website.
For the formal announcement, Obama traveled to La Crosse, Wisconsin, a battleground state home to likely Republican presidential candidate Governor Scott Walker.
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