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President Obama Proposes Major Changes to Overtime

President Barack Obama recently proposed raising the threshold for overtime salary to $50,400 in an op-ed he penned for the Huffington Post. Currently, the threshold is less than half that amount — set at $23,660 per year.

That amount is currently below what is considered to be the poverty line for a family of four. If workers make less money than that, they are required to be paid time and a half for each additional hour past their standard 40 hours a week, without any exceptions. If workers make more money than that $23,660 threshold and they work for an employer who is covered by the Fair Labor Standards Act, they only might be eligible to receive overtime pay.

Employers are not required to pay overtime to any salaried workers making more than the threshold if they have certain types of administrative, professional or executive jobs. To qualify, these workers must perform a certain set of duties. Under President Obama’s new proposal, there are no regulatory changes to this duties test.

Pushback from employers

Business leaders have been quite vocal in their opposition to these proposed changes to overtime law. One sticking point is the proposal to require workers to spend a certain percentage of their time on the job performing certain types of duties to qualify for the exemption to the threshold. Some employers believe this could limit the various types of work managers do, and that the current rule as written allows for more flexibility.

However, labor rights activists and advocates say the current rules give employers too much leeway to set their own definitions of job duties. At this time the likelihood of these changes moving forward is unclear, but if they do become law they will have wide-reaching implications on labor and pay standards across the country.

To learn more about these issues, contact Steve Kardell at Whistleblower Law for Managers today.

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