“The minimum wage they can’t do,” Bill Samuel, director of legislative affairs for the American Federation of Labor and Congress of Industrial Organizations, told Politico. “This is probably the most significant step they can take to raise wages for millions of workers.”
Republicans in Congress and the business lobby are preparing to fight the overtime increase, reported Politico. Under current law, a salaried employee below the $23,660 threshold must get overtime pay -- 1.5 times normal wages -- for every hour worked beyond 40 hours in a week. The current threshold is below the poverty line for a family of four, while the change to $45,000 to $52,000 would put the levels near the median household income and in line with the threshold from 1975 -- when the rule was introduced -- after adjustment for inflation.
An increased qualifying level of $50,440 would boost the wages of 5 million to 10 million workers, according to the Economic Policy Institute. Currently, overtime rules cover about 12 percent of salaried workers and white-collar jobs, defined as “executive, administrative and professional," are exempt, Politico reported. Employees making low wages are often exempt because they have some sort of supervisor role. The new rule is reportedly expected to clarify who qualifies for overtime pay.
“It’s hard to believe that somebody making $30,000 is a supervisor,” Daniel Hamermesh, an economist at the University of Texas at Austin, told Politico. “At this point, I don’t think even our regulations are in line with the original intent of the law.”
Critics of the proposed change pointed to concerns that employers would cut hours of workers to avoid paying overtime and would reduce jobs. Across the country, cities and states have made changes to increase wages for workers. Los Angeles, Seattle, San Francisco and Chicago have all taken steps to increase the minimum wage. A hike from $7.25 to $10.10 proposed by Obama has been stalled in Congress, but four states -- Connecticut, Maryland, Hawaii and Vermont -- have approved increases to at least $10.10.