President Obama to Expand Time and a Half Overtime Wages

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The Labor Department submitted a proposal for changes to the nation’s overtime rules on Tuesday. If adopted, the rules are expected to require businesses to pay ten million more people 1.5 times their hourly wage for overtime. The regulatory arm of the Office of Management and Budget will review the proposal before it is published and opened for public comment.

President Obama called for changes to the nation’s overtime laws last March when he signed an executive order directing the Secretary of Labor to raise the threshold pay for a business to declare an individual a manager or professional and avoid paying overtime to them. The amount was $455 a week, which was last updated in 2004.

Overtime law is governed by the Fair Labor Standards Act and currently requires time and a half pay on work over 40 hours a week if the employee earns less than $23,660 annually. If an individual is a manager and making more than that amount, the law does not require the business to pay extra for overtime.

The amount is not currently adjusted for inflation. If the overtime rate set by the law in 1975 was inflation adjusted, it would require overtime pay for workers making up to ~ $51,000 a year. Some have speculated that the new amount will be approximately $50,000 a year.

In the meantime, a small city in the Bay Area, Emmeryville, has given initial approval to a minimum wage of $16 an hour by 2019. The rate would be the highest in the country when it is fully implemented. There will be tiered increases over the next few years to reach that level. Seattle is currently phasing in a minimum wage hike to $15 an hour.

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