About 290,000 Said To Be Newly-Eligible For Overtime Under Labor Department Proposal
On Tuesday President Obama announced that the Labor Department is prepared to propose a mandate to update eligibility requirements for overtime pay. The CBS Evening News reported, “As many as five million Americans could get a raise” under the new plan. Currently, workers “who make more than $23,660 per year for their 40-hour work week are not eligible for overtime pay. Under the new Labor Department rule, that salary cap would be raised to $50,440 per year. That’s the first overhaul of the overtime rules since 1975.” The Albany (NY) Times Union notes that in the state of New York alone, “up to 290,000 full-time salaried workers” would receive overtime pay if the regulation is approved, or 6.2% of total US workers. At a press conference, Secretary of Labor Thomas Perez recalled, “When I was growing up in Buffalo … if one of my friends’ parents was a manager, that meant they were in the middle class… They may have worked more than 40 hours a week, but they received a fair salary. Today, all too many managers are working hard and falling behind.”
What Happens Next
The Los Angeles Times examines the details of the changes, noting that it’s uncertain when the proposal might take effect. However, National Employment Law Project Director Christine Owens said the regulation “could be adopted by the end of the year” and go into effect January 2016. Former Labor Department policy adviser Corrie Conway, who aided in developing previous overtime regulations in 2004, noted that “it took more than a year to finalize” those changes, and suggested implementation by January 2016 “would be a really aggressive timeline.” For now, the path to the proposal’s implementation is unclear.
What This Means For Small Businesses
Increasing overtime pay for workers is a burden small business owners across New York can ill-afford. As NFIB New York State Director Mike Durant explains in the Albany (NY) Times Union, “We view this as another hurdle for small business owners to try to manage their own employees and to operate their business. This could be another tremendous regulatory expense on the bottom line, which for small business is pretty finite.”
Additional Reading
The Hill, USA Today, and the Wall Street Journal are among the other outlets covering the proposed regulation.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.
