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President Obama plans to change overtime for 5 million workers


Many employees throughout the United States work well over 40 hours per week, yet not all receive compensation for the extra work. Currently, salaried employees earning less than $23,660 per year are entitled to overtime pay for working more than 40 hours in a week. President Obama is now proposing that the minimal income be raised to $50,400 per year for salaried employees to earn overtime pay.

According to Obama, "too many Americans are working long days for less pay than they deserve." He added, "In this country, a hard day's work deserves a fair day's pay. That's at the heart of what it means to be middle class in America." This plan will be a boon to approximately 5 million Americans, many of whom are salaried retail employees, often working up to 80 hours per week.

The Economic Policy Institute estimates that only 11 percent of salaried workers in the United States currently collect overtime under the existing laws. The EPI estimates that the plan would now cover about half of salaried employees who work more than 40 hours per week.

The current laws were established during the time of the Great Depression of the 1930's, when salaried workers were considered "managerial" or white collar workers. Today, however, many salaried employees, such as those working in the retail industry, are in fact doing manual labor. Obama stated, "What we've seen is, increasingly, companies skirting basic overtime laws, calling somebody a manager when they're stocking groceries and getting paid $30,000 a year . . . These folks are being cheated." Once these changes go into effect, employers will have to determine whether to move such employees to a per-hour rate, or limit their work to under 40 hours. Employee rights are constantly evolving in the United States, and understanding your rights as an employee is important to maximize your earnings and to avoid being taken advantage of by your employer.

Source: By Huffington Post "Obama To Unveil Plan To Bring Overtime Pay To 5 Million More Workers", Dave Jamieson, June 30, 2015

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