Obama Administration Extends Overtime Pay Eligibility To Millions Of Workers


The Obama administration is set to extend overtime pay eligibility to millions of American workers by the end of 2016.

The move is another step toward President Barack Obama's goal of strengthening the middle class bracket. The final rule, which will take effect on Dec. 1, 2016, will also enhance the U.S. economy as these higher-earning families spend on different businesses across the country.

The New Rules

The new rules considered about 270,000 comments from the people and interviews from employers, workers, members of the academe and local government officials.

Among the rules in the new overtime pay eligibility initiative include the following:

• Increasing the salary threshold from $23,660 to $47,476 per year, or $455 to $913 per week;

• Amping wages to about $12 billion in the next decade, or $1.2 billion every year;

• Giving overtime protections to 4.2 million additional employees who are not yet eligible for overtime benefits under the federal rule;

• Updating salary threshold every three years;

• Increasing the salary threshold of highly paid employees in such a way that there's little manifestation needed to show that a worker is not eligible for overtime;

• Not implementing the modifications on the "duties test," which determines eligibility for overtime pay.

A Look At The Current Situation

At present, millions of Americans render overtime work every week, yet not all are given the extra pay they deserve. The new rule aims to change that by trying to extend overtime protections to those who still do not qualify under the federal law for overtime eligibility.

Over the decades, working 40 hours per week has been the foundation of families. When employers call on workers to work extra, they had to pay more money, giving families higher incomes and better opportunities to get ahead in both their family and work lives.

While the concept of overtime seems appealing, this has not been the case in the last four decades. Because of inflation and some efforts made by lobbyists, the full benefits of the concept are not felt by all concerned. In fact, the percentage of employees that qualify for the protection based on their salaries dropped from 62 percent in 1975 to only 7 percent at present.

More parents are now working outside the home. In fact, six out of 10 households with children have both parents working. Although more businesses have emerged to provide about 14.6 million jobs in 74 consecutive months, many people still feel like their salaries have stagnated over the years.

"That's why tomorrow, the Department of Labor is finalizing a rule to update overtime protections so they can help millions more Americans," the White House statement released on May 17 reads.

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