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U.S. NEWSWednesday 18 May 2016
Overtime pay may become reality for more U.S. workersÂ
CHRISTOPHER S. RUGABER Â 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-
time.
“We can’t pay you time
and a half because you’re
slow,†she said. “This is
extremely frustrating for
me.â€q
