More Workers Eligible for Overtime Pay Under Rule Change
A new rule defining who must receive overtime pay will cover workers who make up to $100,000 a year, up from the $65,000 overtime ceiling proposed previously.
Also, more low-wage workers would automatically become eligible for overtime, and emergency services workers would earn overtime pay if they work more than 40 hours a week.
The U.S. Department of Labor on Tuesday issued the long-awaited and far-reaching change to the 1938 Fair Labor Standards Act. About 11 million workers received overtime pay in 2002, and the final rule is more generous to high- and low-wage workers than the previous proposal, the Washington Post reported.
Labor Secretary Elaine L. Chao said in a statement that "workers win" under the rule change. "The final rule accomplishes exactly what we intended from the start, which is to preserve and protect overtime rights for white-collar workers."
The changes could give up to 1.3 million low-wage "white collar" workers an additional $375 million in pay each year, the department said. The current rule grants automatic overtime to those who earn less than $8,060; the cap was raised to $23,660 a year.
The regulations are set to take effect in 120 days following publication in the Federal Register, likely on Friday, Reuters reported.
Some labor leaders and Democrats said they fear the rules could be manipulated to deny overtime pay, while businesses and Republican lawmakers said an update to the overtime rules is badly needed. The Labor Department contends only about 100,000 workers, nearly all of them earning more than $100,000 a year, would lose overtime.
Sen. Tom Harkin (D-Iowa) said in a statement that he is "beyond skeptical" about the revisions. "This President has gone out of his way time and again to undercut working families' right to overtime pay for overtime work. . . . The Senate will soon have the opportunity to stand up and be counted on this issue, and I look forward to the debate."
The overtime proposal struck a chord with American workers, who last year flooded the Labor Department with more than 75,000 letters, many of them expressing fears that the changes would cost them money or require them to work more hours.
Ross Eisenbrey, vice president of the Economic Policy Institute, the labor-backed research organization that has criticized the plan, said it sounded as though the department "had made some positive changes."