Millions of Americans Could Get a Raise Soon

Proposed new rules would allow more people to be paid for working overtime. But is there a downside?

Millions of people stand to earn more money under new rules the Obama administration is currently drafting, Bloomberg Business reports.

The rules would redefine who qualifies for overtime pay. That would force more businesses to pay time-and-a-half when an employee logs more than 40 hours of work per week:

Many employees now earning as little as $23,660 a year — below the federal poverty line for a family of four — aren’t entitled to overtime pay because they are considered managers.

Some U.S. Department of Labor officials want President Obama to lift that overtime cutoff salary of $23,660 to as high as $51,000, while some Democratic senators want him to lift it to $56,680.

In other words, depending on which limit is proposed, only workers earning $51,000 or more (or $56,680 or more) could be considered executives and therefore exempt from overtime compensation.

U.S. Sen. Sherrod Brown, a Democrat from Ohio, tells Bloomberg:

This is absolutely one of the best practical ways to give people the on-ramp to the middle class… When you strip people of their overtime pay, which is what’s happened over the years, they really don’t have a chance to get ahead.

Opponents of the new rules, such as business lobbyists, argue that employees who currently log overtime hours and do not earn time-and-a-half for those hours might be hurt, however.

David French, senior vice president of government relations for the National Retail Federation, tells Bloomberg:

It’s likely you would see fewer managers and assistant managers and more hourly workers… Fewer slots for restaurant managers would limit career advancement.

The rules have also been scrutinized because Obama would use an executive order to put them into place.

So far this year, Obama has signed seven executive orders, according to In each of the six prior years, he issued anywhere from 20 to 39, according to the National Archives.

Like this story? SHARE it with your friends on Facebook.

Karla Bowsher
Karla Bowsher
I’m a freelance journalist and former newspaper reporter who has covered both personal and public finance. I've worked for a top 50 major metro daily and a community newspaper as well as ... More


850 Active Deals

More Deals