Millions More People Will Now Be Eligible For Overtime Pay

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May 19, 2016

In 2004, the cutoff for overtime pay was $23,660. This meant that anyone earning under that who worked over 40 hours a week had to receive time-and-a-half overtime pay. But, as The New York Times reports, a new regulation from the Obama administration and that was issued by the Labor Department on Wednesday, May 17, now includes all salaried workers earning up to $47,476 a year.

The rule, which is set to go into effect on Dec. 1, has angered some and has been seen as a victory by others. As with mostmatters in politics and business, however, the rule will not play out quite as simply as it is stated when it goes into effect. While some workers will simply earn the time-and-a-half required for working over 40 hours a week, other workers may find themselves working fewer hours as employers try to limit their time at work and avoid the 40-hour threshold. Another possibility is that employers will increase the salaries of some workers to push them over the cutoff.

Opponents of the increase believe that the new measure is going to cost billions of dollars and argue it will undermine the morale of salaried employees by requiring them to account for every hour of their workdays.

Some proponents of the change, however, argue that the cutoff should be raised even higher, to about $51,000. In inflation-adjusted dollars, $51,000 would equal about when the cutoff was in 1975, when the Ford administration made the last major expansion of overtime eligibility.

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