More overtime pay for 5m US workers with Obama plan

Employees working at the MasterCard offices in New York.
Employees working at the MasterCard offices in New York. PHOTO: REUTERS

WASHINGTON • United States President Barack Obama has announced a proposal that would make nearly five million more workers eligible for overtime pay, a move that would touch almost every sector of the US economy and could face legal challenges.

Mr Obama, in an editorial posted on the Huffington Post website on Monday, said the proposal would more than double the maximum income a salaried worker can earn and still be eligible for overtime pay to US$50,440 (S$67,000), or US$970 a week.

The current threshold is US$23,660.

"Right now, too many Americans are working long days for less pay than they deserve," he wrote.

It was not immediately clear if Mr Obama would also move to narrow an existing exemption from overtime pay protections for low-level, white-collar workers, as many observers had expected.

OVERWORKED, UNDERPAID

Right now, too many Americans are working long days for less pay than they deserve.

PRESIDENT BARACK OBAMA, in an editorial in Huffington Post website 

He said he would discuss more details of the proposal later this week.

When the full proposal is published, it will set off a comment period when business groups are expected to argue that the rules would not have their intended effect of putting more money in workers' pockets and could kill jobs.

Mr Randy Johnson, a US Chamber of Commerce vice-president, said making more employees eligible for overtime would lead to a drop in the number of full-time jobs and some workers would lose benefits and opportunities for promotions.

"This change is another example of the administration being completely divorced from reality and adding more burdens to employers and expecting them to just absorb the impact," Mr Johnson said.

But supporters of the proposal, including Ms Judith Conti at the left-leaning National Employment Law Project, say overtime pay protections were created not to increase workers' pay, but to promote the 40-hour work week.

"Some people will work fewer hours for the same money and have more control over their lives, some will work the same hours for more money," she said.

REUTERS

A version of this article appeared in the print edition of The Straits Times on July 01, 2015, with the headline 'More overtime pay for 5m US workers with Obama plan'. Print Edition | Subscribe