More than four million US workers will become newly eligible for overtime pay under new rules DOUBLING the maximum salary threshold
The annual salary at which companies can deny overtime pay will go from $23,660 to nearly $47,500
Overtime protections require employers to pay 1.5 times a worker's regular salary for any work past 40 hours a week
The new rules aim to counter erosion in these regulations, which date back to the 1930s
The White House, which was set to release the rules on Wednesday, estimates that pay will increase by $1.2 billion a year over the next decade
Some companies may instead choose to reduce their employees' hours to avoid paying the extra wages
More than four million US workers will become newly eligible for overtime pay under rules to be issued Wednesday by the Obama administration.
The annual salary threshold at which companies can deny overtime pay will be doubled from $23,660 to nearly $47,500 under the new rules, first released in draft form last summer.
The policy changes are intended to counter erosion in overtime protections, which date from the 1930s and require employers to pay 1.5 times a worker's regular salary for any work past 40 hours a week.
In the fast food and retail industries in particular, many employees are deemed managers, work long hours, but are barely paid more than the people they supervise.
The new rules would make 4.2 million more salaried workers eligible for overtime pay. Hourly workers would continue to be mostly guaranteed overtime.
The White House estimates that the rule change will raise pay by $1.2 billion a year over the next decade.
Some companies may instead choose to reduce their employees' hours to avoid paying the extra wages.
'Either way, the worker wins,' Vice President Joe Biden on a conference call with reporters Tuesday afternoon.
Business groups, however, said the changes will increase paperwork and scheduling burdens for small companies.
They fear the new rules may force many businesses to convert salaried workers to hourly ones in order to more closely track working time. Many employees will see as a step down, they said.
'With the stroke of a pen, the Labor Department is demoting millions of workers,' David French, a senior vice president for the National Retail Federation, said. 'Most of the people impacted by this change will not see any additional pay.'
The overtime threshold was last updated in 2004 and now covers just seven per cent of full-time, salaried workers, administration officials said. That's down from 62 per cent in 1975.
The higher threshold, which will take effect December 1, will lift that ratio back to 35 per cent, Labor Secretary Tom Perez, one of the leaders in the formulation of the new rules for the past two years, said.
The new regulation is intended to increase earnings for middle and lower-income workers, which have been stagnant since the late 1990s, Perez said.
Overtime pay hasn't received as much attention as nationwide efforts to increase the minimum wage, but it could have a broad impact.
'This in essence is a minimum wage increase for the middle class,' Judy Conti, federal advocacy coordinator for the National Employment Law Project, an advocacy group, said.
Overtime has become a sore point for many managers, assistant managers, and management trainees in the fast food and retail industries.
They have complained in lawsuits against chains such as Chipotle and Dollar General that they spend the vast majority of 50 or 60-hour weeks working cash registers, mopping floors, or performing other similar tasks.
Yet they don't get paid overtime when they clock more than 40 hours in a week./p>
* * *
Perez said the administration took several steps in the final rule to address business concerns: The threshold was lowered from the original proposal of $50,440; bonus payments can count toward the threshold; and the rule will have a long phase-in before taking effect December 1.
* * *