Over 4 million U.S. workers became newly eligible for overtime pay Wednesday after a rule was issued by the Obama administration.
The rule aims to expand and protect overtime rights which have been diminished over the last decade due to inflation. Overtime protections require employers to pay one and a half times a worker's wage for work that exceeds 40 hours a week. But for many years, these protections did not apply to workers who exceeded the $23,660 salary threshold. Under the new rule, protections would be provided for workers making up to $47,500.
“For generations, overtime protections have meant that an honest day's work should get a fair day's pay, and that's helped American workers climb the ladder of success. That's what middle-class economics are all about. But after years of inflation and lobbyists' efforts to weaken overtime protections, that security has eroded for too many families,” said President Obama in an email published on the White House Website on Wednesday.
In defense of the new measures, Obama cited the Fair Labor Standards Act, passed during the Great Depression, which ensures that people working over 40 hours per week are paid more for extra time.
Critics argue that by expanding the salary range that must be guaranteed overtime pay, the new rule will actually stifle hiring of new workers by making it more expensive to bring them on.
“This regulation hurts the very people it alleges to help. Who is hurt most? Students, non-profit employees, and people starting a new career. By mandating overtime pay at a much higher salary threshold, many small businesses and non-profits will simply be unable to afford skilled workers and be forced to eliminate salaried positions, complete with benefits, altogether,” said House Speaker Paul Ryan in a statement Wednesday.
“For the sake of his own political legacy, President Obama is rushing through regulations — like the overtime rule — that will cause people to lose their livelihoods. We are committed to fighting this rule and the many others that would be an absolute disaster for our economy.”
But top Obama administration officials say the importance of fair wages outweighs the risk of reactionary measures by employers, arguing even if employers decrease hours as a result of the rule, those decreased hours will allow for more time with family, to go back to school or pursue additional job and technical training.
