Posted on 05/17/2016 5:18:40 PM PDT by jazusamo
The Obama administration late Tuesday unveiled a final rule extending overtime pay to millions of workers.
The regulation makes anyone earning up to $47,476 a year, or roughly $913 a week, eligible for overtime pay.
The rule is one of the most significant regulatory initiatives of President Obama’s second term, and has drawn fierce opposition from industry groups. With the Republican Congress standing firm against a minimum wage increase and other economic proposals from Democrats, the president has exerted the power of the executive branch to try and burnish his legacy.
In a concession to business groups, the administration reduced the threshold for overtime pay by $3,000, down from the $50,440 cutoff initially proposed.
But the policy change created by the rule is still dramatic, as the cutoff for overtime pay now stands at $23,660 per year.
In a call with reporters, Secretary of Labor Tom Perez said the change is in response to the more than 27,000 public comments that his agency received. Industry groups had been pushing back against the maximum salary, as well as the annual adjustment rate for overtime wages and the deadline for businesses to comply.
In response, the threshold for overtime pay will be updated every three years, with those updates indexed to ensure the threshold remains at the 40th percentile of full-time salaried workers in the lowest income region of the country. Based on projections of wage growth, the Labor Department is expecting anyone making upwards of $51,000 to be eligible for overtime pay by January 1, 2020.
The department considered making changes to the “test” of primary executive, which are the administrative and professional duties an employee must perform to be exempt from earning overtime, but decided against it after employers expressed concerns that the test would become too difficult and costly to implement.
The administration also honored employers' requests to count bonuses and commissions as part workers' salaries when determining overtime eligibility. Under the rule, bonuses and incentive payments can count toward up to 10 percent of the new salary level.
“The middle class is getting clobbered, but I think we’re making some real progress here and it’s based on a simple premise that if you work overtime you should get paid for the hours you work,” Vice President Biden said Tuesday afternoon.
Under the rule, Perez said 4.2 million workers — more than half women — would be newly eligible for overtime pay. Workers will earn an additional $12 billion in wages over the next 10 years, he said.
The administration is giving employers more than six months to comply with the rule.
“Our goal is to facilitate 100 percent compliance,” Perez said. “We don’t go out with our ticket books trying to play the gotcha game. Our goal is to work with employers.”
The U.S. Chamber of Commerce said that if the administration had really listened to employers, it would have lowered the salary threshold for overtime well below $47,476.
“Despite the modifications, the dramatic escalation of the salary threshold, below which employees must be paid overtime for working more than 40 hours a week, will mean millions of employees who are salaried professionals will have to be reclassified to hourly wage workers,” Randy Johnson, the chamber’s senior vice president of Labor, Immigration, and Employee Benefits said in a statement.
“Small businesses, nonprofits, and public sector employers will be especially impacted as they will have the hardest time finding more income to cover the increased labor costs, even if they will have a longer time to implement the new requirement.”
And since the rule calls for an update every three years, Johnson argues that employers will be further burdened in the future.
“This will result in charities providing fewer services to those in need, local governments having to reduce services and raise taxes, and small businesses having to curtail operations or plans to expand,” he said. “The Department of Labor failed to accurately assess the impact this regulation would have on these, and other, employers.”
The National Retail Federation called the rule a “career killer.”
“Most of the people impacted by this change will not see any additional pay," David French, NRF’s senior vice president for government relations, said in a statement. "Instead, this sudden and extraordinary increase will mean more red tape and fewer advancement opportunities for salaried professionals."
more layoffs coming because of this
i am not against all such measures but O does them secretly and then just springs them on USA like a Kenyan or Indonesian or Muslim dictator would do
someone needs to remind O that he’s in USA (legally or not) and should try to act like an American
Congress has abdicated.
Yep, that’s what happens when you’re afraid to be called ‘racist’.
What a cowardly congress we have and unfortunately when we need them to man up the most.
They’ve screwed a lot of people out of extra hours because of this.
Absolutely. Obama and the liberals continue to bring down the country.
Pharaoh Obama decrees
“So let it be written. So let it be done.”
What executive power? Where is this "power" mentioned In the US Constitution? This is a completely illegal act by Obama. Just as illegal as Nixon's wage and price controls. How soon before Obama decides how much Americans going to be allowed to get paid? How soon before Obama decides what career a person will allowed to enter. How soon before Obama decides to start assigning people careers for the rest of their life? This tyranny called the Obama Administration has gone on long enough!!
Well said! This tyrant can’t be gone fast enough, January 20 is not soon enough.
My son had to tell two of his employees today that they now have to fill out a time sheet and shift to set hours with no extra hours. Both very very upset. Both excellent employees who enjoy what they do, are very good at their jobs, incredibly reliable and don’t want to lose the flexibility of being able to function and work independently. They often took work home with them so they could work uninterrupted. No more flex hours which they used as an advantage to avoid ever present traffic problems. Said one of them commented that he felt like he had a demotion.
Thanks for posting that, it’s the type of thing that’s never considered in these arbitrary fiats (illegal in in my view) regarding good employees that don’t want their system messed with.
How about not taxing people to death and over-regulating business. That would create jobs and help everyone except Race Baiting Poverty Pimps... oh, never mind. Answered my own question.
Ryan and is band of idiots allow this to go on and he questions trump F them all
Everyone that worked for me was on salary. None of them ever worked over 40. Now they’re all on hourly - the ones under 50k. Big pay cuts for all. They were all on full paid insurance too. Now none of them are. These people are going to go broke with Obamas ongoing help. Like I need that dummy’s help on how to keep a good crew together.
You’re welcome. Over the years as a business owner, have found that to some a job is just a paycheck, to others the same job is viewed as an opportunity to excel, grow and feel good about their contributions. Successful businesses generally need some of each type and it shouldn’t be determined by any government agency based on a pre-determined salary level. One size never fits all and often doesn’t even fit most.
You're right on mark with that! Big time!
Still More Marxist claptrap designed to destroy America and its economy.
This *sshole never stops pulling things downward.
NLRB already mandates OT for hourly workers, that's why so many low level "supervisors" and "managers" get put on salary and then worked 60-70 hour weeks for a 40 hour salary. Happened to me in the '70s with TRW (I left) and is happening to son-in-law today in transportation.
I've lost count of how many people I've known who refused promotion because they'd lose too much money just to gain a meaningless title.
(Also reminds me of a time long ago when promotion to O4 meant just enough pay raise to throw a decent promotion party.)
As to the how was it done...I'm not knowledgeable enough to speak on labor laws vs regulations & I wasn't in on any of the alleged talks leading up to this but it sure rings of "stroke of a pen" rule.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.