President Barack Obama likes to say he’ll use the power of the pen to do whatever he can for American workers. But now that Donald Trump has won the White House, the real estate mogul can use the same pen to undo one of Obama’s most far-reaching reforms: bringing overtime protections to millions of workers.
Most hourly workers in the U. S. are automatically entitled to time-and-a-half pay when they work more than 40 hours in a week. But because of the way the rules have been written, millions of salaried employees ? like retail store managers and white-collar professionals ? haven’t enjoyed the same rights. That’s given employers an incentive to work those employees longer hours at the same base salary.
Earlier this year, the Obama administration overhauled those rules for the first time in years. Under the changes, far more employees who work on salary will be guaranteed overtime when they work extra hours.
The administration achieved that by raising what’s known as the “salary threshold.” All workers paid salaries below the threshold are entitled to time-and-a-half pay when they top 40 hours. The previous threshold was just $23,660. The new one is $47,476, or roughly double. That means just about any salaried worker earning less than that is ripe for overtime pay, regardless of their job duties, as of Dec. 1.
But all of that is now in limbo after the election. Republicans or the Trump administration could undo the changes ? though it wouldn’t be easy.
Faced with higher labor costs, business groups have fought the overtime reforms ever since the White House first floated them. The changes leave businesses with a difficult choice: Either limit eligible workers’ hours to 40, or be ready to start paying a premium on their labor. The Obama administration hopes that dilemma will leave workers with either bigger paychecks or shorter workweeks and a better work-life balance. Employers simply see higher labor costs.
By the White House’s estimate, the changes are bringing overtime protections to an additional 4.2 million workers, though some economists anticipate the real number will be even greater. Under the new rules, the Labor Department will update the salary threshold every three years to make sure it keeps pace with inflation and that the share of salaried workers getting overtime pay doesn’t fall.
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