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."
I suspect that the place where I work was planning on making thousands of low level managers salaried. They have been cutting positions since Obama came along, plus cutting hours for others. They also created a new lower level management position to take the place of a higher manager, and these managers have been taking up the slack, but it has been getting harder for them to do their job plus every other downsized job dumped on them in 40 hours. The solution, of course, would be to make the low level managers salaried at a low pay scale. Then they could work for 60-80 hours doing the work of five people for less than minimum wage.
If we had an economy worth a d***, people who felt a company was abusing them by imposing too heavy a workload could just go elsewhere.
The problem I see with this rule is that it kills the salaried person willing to voluntarily work long hours to get ahead in the company. That was always my route to whatever success I had...
This country is going to be left with no work ethic at all, as is intended, I suppose.
I’m sure Congress is working on a fix as we speak./s
Secretly? That’s patently absurd.
We’ve been scoping this work out for months now, the only question being what the cutoff figure would be.
fine but not a single merchant or businessperson knows about it
that’s what I meant
Obama is leaving a MESS for the Donald to have to clean up in a couple of months.
fine but not a single merchant or businessperson knows about it
that’s what I meant
<><><
But what you are saying is incorrect.
I work for a business and this has been known for months if not longer.
If a business employs potentially impacted non exempt employees and does not know about this, then they have chosen to remain in the dark about it.
It is a component of the Fair Labor Standards Act and is not at all secret.
Another regulation added to Directive 10-289.
It’s not that strange a request. Employers have used salaried positions to avoid overtime for a while. My daughter’s employer is chomping at the bit to convert her to management so they can move her from 29 hours to 60 hours. This rule would ruin their plans.
It will have a huge impact on retail where this occurs frequently.
When you add in employees working from home after work hours (as I do), it starts to add up.
You know about it. Fine. Most Merchants and small business people didn’t and still don’t. They’re busy trying to stay alive in this depression economy and nobody told them anything about this plan to try to force them to pay more. Maybe it was published in the federal regs but the business people were never told, contacted, asked for their advice or certainly not their input or votes. Now there will be some worker raises and more worker layoffs for sure — the to- be-laid off workers were never informed or asked to vote on whether they went to be unemployed either. Communist government doesn’t work well. Leaving all ideological debates aside, communism and fascism do not work well for society or for most individuals ( just for the dictators in charge and maybe a few privileged people from time to time).
https://www.dol.gov/whd/overtime/final2016/
You should really try to be more informed about things if you intend to comment about them.
It’s been out there for more than 2 years now, and if you read the document at the link, you’ll learn that there has been considerably more discussion and communication about this that you are aware of.
It’s OK, though, it clearly does not apply to you in any way, shape, or form. It does not appear that you are a non exempt employee earning less than 47K.
No, I am not impacted by the illegal Communist dicator’s order. indeed, I lack employment where I could benefit from it. There are almost no jobs in this depressed economy, outside of a couple of specialized sectors and geographical locations.
I was commenting about how our “system” is broken and noting how some will get paid more...congratualations to you..... while others will need to get laid off now.
Also, since you indicated an interest, I have never been paid one red cent for any of the many thousands of hours of overtime hours I’ve worked when I had regular employment. Not extra pay for overtime. Not any pay whatsoever for overtime. Not one cent. (And I never would look to government to force my employer to pay me monies I didn’t negotiate with him for my labors, from my perspective its simple theft where some folks get helped by a corrupt big bully and everyone else suffers....is all...but that’s just my “conservative” political sentiment and you may differ of course. Perhaps given human nature... if government came around and forced my employer to raise my pay... I might change my tune and vote for those politicians who used our government in that manner.... its always nice to get more pay, after all!!! Regardless of how it gets into your checque, it still spends! But anyway all chatter about corrupt political hacks buying votes with other people’s money, I wish you all the best!.. and I am confident you will find many nice things to purchase with your higher wage cheque. Best to you!)
So how is this going to work out for teachers, who notoriously take home papers to correct?
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