The minimum salary for automatic eligibility for overtime will rise from $23,660 to $47,476.
The Obama administration on Tuesday unveiled the final version of a long-awaited and controversial rule to extend overtime pay to 4.2 million U.S. workers, which marks one of the administration’s most significant moves to address stagnant wages.
The rule, which has drawn intense criticism from business groups and Republicans, doubles the maximum annual income a salaried worker can earn and still be automatically eligible for overtime pay from $23,660 to $47,476 and requires that threshold to be updated every three years. It takes effect Dec. 1.
Officials said many workers will earn more money, an estimated total of $12 billion over the next decade, while others will work fewer hours for the same pay.
“More than 4 million workers are either going to be paid more or get time back to raise their family, go to school or retrain to get a better job,” Vice President Joe Biden said during a phone call with reporters on Tuesday.
The White Residence estimates that the adjustment will certainly delivering overtime rights to 4.2 million workers that are currently excluded. It will certainly additionally clarify eligibility for one more 8.9 million workers that might or might not have actually overtime protections under The latest rules, officials said.
On a call along with reporters Tuesday, Labor Secretary Tom Perez said the reform was meant to treat “the two underpay and overwork.”
“The overtime rule is concerning making sure middle-class jobs pay middle-class wages,” Perez said. “Some will certainly see much more cash in their pockets … Some will certainly get hold of much more time along with their family … and everybody will certainly receive clarity on where they stand, so that they can easily stand up for their rights.”
Vice President Joseph R. Biden Jr., who will travel to Columbus, Ohio, on Wednesday to promote the new rules, said they touched on a core issue for Mr. Obama — ensuring that middle-class workers are treated fairly.
“The middle class is getting clobbered,” Mr. Biden told reporters. “If you work overtime, you should actually get paid for working overtime.”
“For the past 40 years, overtime protections have been increasingly weakened,” Mr. Biden added, noting that more than 60 percent of salaried workers qualified for overtime in 1975 based on their salaries, but only 7 percent do today.
Opponents argued that the measure could cost billions of dollars and would undermine the morale of salaried employees by requiring them to account for every hour of their workdays.
“This is an extreme revision in the white-collar threshold,” said David French of the National Retail Federation. “By executive fiat, the Department of Labor is effectively demoting millions of workers.”
Republican lawmakers, who are close to many of the industries that oppose the new rule, have vowed to block it during a mandated congressional review period.
With Donald J. Trump as their presumptive presidential nominee, however, the issue is fraught with risk for Republicans. Any attempt to repeal the regulation could exacerbate an already palpable split between Mr. Trump’s blue-collar supporters and the party’s establishment donors and politicians.
Paul Porter, a truck driver from Ava, Mo., who is a member of the Teamsters union and a supporter of Mr. Trump, said he already received time and a half after eight hours of work, but strongly favored the new overtime regulation. “I have friends who are managers who get taken advantage of terribly,” he said.
The rule will likely face legal challenges, including claims that the U.S. Labor Department flouted legal requirements for creating new regulations. Republicans in Congress have said they will move to block the rule, but they would need to overcome a veto from President Barack Obama.
The new threshold was lower than the $50,440 standard proposed by the Obama administration last year, but the last-minute change to lower it, which was widely expected, did little to appease critics.
Any federal standard above the $35,100 overtime threshold in New York, which has a high cost of living, will inhibit economic growth in more rural states in the South and Midwest, Tammy McCutchen, a Washington D.C. lawyer who works with the U.S. Chamber of Commerce, said on Tuesday before the final rule was announced.
The threshold also disappointed proponents of the new rule, including Ross Eisenbrey of the left-leaning Economic Policy Institute, who first pitched an overhaul to the White House in 2013.
“It means a million fewer employees will be helped,” he said before the rule was released.
The White Residence finalized the rule now so that Republicans in Congress can’t bottle it up through the Congressional Review Act. Repub finest shot now would certainly be attaching a rider to spending legislation to block it, Yet it’s unlikely Democrats or the White Residence would certainly go along along with that. The brand-new rules are slated to go in to effect on Dec. 1.
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