Business: New Plan to Expand Overtime Pay

Obama has recently announced a rule to make more Americans eligible for overtime pay. He plans to require employers to pay overtime for employees working more than forty hours per week. This change will allow employees who are managers or professionals to receive overtime pay. Even people who are classified as managers are currently below the federal poverty line. Even this title of “manager” remains ambiguous in certain markets, so many workers are currently unable to qualify for overtime pay. These middle-and lower-class employees will be presented with an opportunity to grow after stagnant wages following the recession. One estimate made by the Economic Policy Institute predicted that this overtime-pay-program would reach about 15 million new workers.

Politicians have been working towards this change for some time, and President Obama said, “Right now, too many Americans are working long days for less pay than they deserve.” Republicans, on the other hand, have argued that the decision will result a sever decrease in jobs. Perhaps employers will simply decrease workers’ hours in order to avoid paying employees these overtime wages. The regulations on overtime wages would take effect in 2016, and employees of restaurants and retail will be most strongly affected. This new plan has been created in the hopes of modernizing the overtime pay system.

Contributor: Hannah Smith

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