NORTHAMPTON, Mass. (WWLP)- President Barack Obama wants more people eligible for overtime pay.
If you work more than 40 hours a week, employers have to pay you overtime. But managers earning more than $455 a week, or $23,000 a year can be exempt, and paid a straight salary. The Labor Department said inflation over the last several years is cause to change that.
The proposal would double the threshold, which employers can avoid paying overtime to $970 per week by next year. That means that employees that earn a salary of under $50,000 a year will be assured overtime if they work over 40 hours a week.
This would include retail, fast food, bankers, insurance agent managers and others to claim that overtime pay.
Patricia Crosby, the Executive Director of the Franklin Hampshire Regional Employment Board told 22News, “Some of them young people and some of them at pretty low wage jobs, may be taken advantage of and that’s what’s fueling this.” Workers often take on a managerial title and don’t get a raise. But this could also be a big adjustment for small businesses. “One thing is to pay people more the other thing is to cut back on their hours and hire another person and of course we like to see new jobs but again its adding to payroll costs for the employer.”
There is also discussion on adjusting the threshold for overtime pay for different areas. The last time the overtime threshold was updated was in 2004.
The proposal still must be finalized and pass through Congress to be enacted.