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U.S. NEWSWednesday 18 May 2016

Overtime pay may become reality for more U.S. workers 

CHRISTOPHER S. RUGABER            In this May 6, 2016, file photo, President Barack Obama speaks in the briefing room of the White                                     administration, said the rule
AP Economics Writer              House in Washington.                                                                                                                  could leave many workers
WASHINGTON (AP) — More                                                                                                                                                 with less flexible schedules.
than 4 million U.S. workers                                                                                                                          Associated Press  That’s because employees
will become newly eligible                                                                                                                                             eligible for overtime are
for overtime pay under           call with reporters Tuesday  last updated in 2004 and         mum wage, but it could                                                  only paid for the hours they
rules to be issued Wednes-       afternoon.                   now covers just 7 percent        have a broad impact.                                                    work.
day by the Obama admin-          Business groups, however,    of full-time, salaried work-     “This in essence is a mini-                                             As a result, an hourly worker
istration.                       said the changes will in-    ers, administration officials    mum wage increase for the                                               “who takes an afternoon
The policy changes are in-       crease paperwork and         said. That’s down from 62        middle class,” Judy Conti,                                              off to attend a parent-
tended to counter erosion        scheduling burdens for       percent in 1975.                 federal advocacy coordi-                                                teacher conference will
in overtime protections,         small companies and force    The higher threshold, which      nator for the National Em-                                              not be paid for that time,
which date from the 1930s        many businesses to convert   will take effect Dec. 1, will    ployment Law Project, an                                                but an employee (who is
and require employers to         salaried workers to hour-    lift that ratio back to 35 per-  advocacy group, said.                                                   exempt from overtime) will
pay 1 ½ times a worker’s         ly ones in order to more     cent, Labor Secretary Tom        Overtime has become a                                                   be paid her full guaranteed
regular salary for any work      closely track working time.  Perez said. Perez has spear-     sore point for many man-                                                salary,” she said in congres-
past 40 hours a week.            Many employees will see as   headed the administra-           agers, assistant managers,                                              sional testimony last week.
In the fast food and retail in-  a step down, they said.      tion’s effort and worked on      and management trainees                                                 Perez said the administra-
dustries in particular, many     “With the stroke of a pen,   formulating the rule for the     in the fast food and retail                                             tion took several steps in
employees are deemed             the Labor Department is      past two years.                  industries. Despite their ti-                                           the final rule to address
“managers,” work long            demoting millions of work-   The new rule is intended to      tles, they have complained                                              business concerns: The
hours, but are barely paid       ers,” David French, a se-    boost earnings for middle-       in lawsuits against chains                                              threshold was lowered from
more than the people they        nior vice president for the  and lower-income work-           such as Chipotle and Dol-                                               the original proposal of
supervise.                       National Retail Federation,  ers, Perez said, which have      lar General that they spend                                             $50,440; bonus payments
Under the new rules, first       said. “Most of the people    been stagnant since the          the vast majority of 50- or                                             can count toward the
released in draft form last      impacted by this change      late 1990s. Overtime pay         60-hour weeks working                                                   threshold; and the rule will
summer, the annual salary        will not see any additional  hasn’t gotten as much at-        cash registers, mopping                                                 have a long phase-in be-
threshold at which com-          pay.”                        tention as nationwide ef-        floors, or performing other                                             fore taking effect Dec. 1.
panies can deny overtime         The overtime threshold was   forts to increase the mini-      tasks typical of regular em-                                            Mara Fortin, president and
pay will be doubled from                                                                       ployees. Yet they don’t get                                             CEO of seven Nothing
$23,660 to nearly $47,500.                                                                     paid time and a half when                                               Bundt Cakes bakeries in
That would make 4.2 million                                                                    they clock more than 40                                                 San Diego, said she might
more salaried workers eligi-                                                                   hours in a week.                                                        give raises to her “super-
ble for overtime pay. Hourly                                                                   Still, Tammy McCutchen,                                                 star” managers to lift their
workers would continue                                                                         a lawyer who represents                                                 pay above the overtime
to be mostly guaranteed                                                                        employers and a former                                                  threshold. But she would
overtime.                                                                                      Labor Department official                                               have to cut back on end-
The White House estimates                                                                      during the George W. Bush                                               of-year bonuses she fre-
that the rule change will                                                                                                                                              quently gives to offset the
raise pay by $1.2 billion a                                                                                                                                            cost.
year over the next decade.                                                                                                                                             Fortin has 14 salaried man-
In addition, some compa-                                                                                                                                               agers and assistant manag-
nies may instead choose                                                                                                                                                ers among her 110-mem-
to reduce their employees’                                                                                                                                             ber staff. The new rule will
hours to avoid paying the                                                                                                                                              create problems for man-
extra wages.                                                                                                                                                           agers, some of them new-
“Either way, the worker                                                                                                                                                er, who take longer to get
wins,” said Vice President                                                                                                                                             their work done, she said.
Joe Biden on a conference                                                                                                                                              She might have to cut their
                                                                                                                                                                       base pay so they make the
                                                                                                                                                                       same amount as they do
                                                                                                                                                                       now, even including over-
                                                                                                                                                                       “We can’t pay you time
                                                                                                                                                                       and a half because you’re
                                                                                                                                                                       slow,” she said. “This is
                                                                                                                                                                       extremely frustrating for
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