A new move from President Barack Obama aims to make more Americans eligible for overtime pay. The proposal, announced Tuesday, could mean bigger paychecks for up to five million workers.
Employees with a salary of $23,660 a year or more can be considered management and barred from time-and-a-half pay, even if they work more than 40 hours. The proposed change from the Obama administration would raise the bar to $50,440. And it’ll move in the future to keep pace with inflation and wage growth.
Dan Hamermesh, Professor Emeritus of economics at University of Texas at Austin, doesn’t think the overall effects will be very large. Many workers will get small wins: either get a slight bump in take home pay or have slightly shorter hours for the same salary.
“It will also, I’m pretty sure, create jobs,” he adds. “If an extra hour becomes more expensive, some employers are gonna wanna hire more people.”
This is all likely to raise costs for companies, which is why business advocates aren’t happy.
A change like this does not require approval from Congress, but it’s not a done deal yet. It’ll be open for public comment and could take several months to finalize.
If you’re a member of your local public radio station, we thank you — because your support helps those stations keep programs like Marketplace on the air. But for Marketplace to continue to grow, we need additional investment from those who care most about what we do: superfans like you.
Your donation — as little as $5 — helps us create more content that matters to you and your community, and to reach more people where they are – whether that’s radio, podcasts or online.
When you contribute directly to Marketplace, you become a partner in that mission: someone who understands that when we all get smarter, everybody wins.