AFL-CIO: New Proposal On Overtime Pay Could Impact Millions
President Barack Obama unveiled a new proposal in June that would ensure that millions more Americans would earn overtime wages for working more than 40 hours a week. The measure would raise the threshold for paying salaried workers overtime to those who make $50,440 or less a year.
Under current law, companies are not required to pay overtime to salaried employees making just over $23,000 a year, even if the workers perform the duties of hourly workers and put in more than 40 hours a week. While hourly employees do make overtime for working in excess of 40 hours a week, usually salaried employees don’t. It’s a loophole the U.S. Department of Labor wants to close.
The president of the Georgia AFL-CIO, Charlie Flemming, told “A Closer Look” the new overtime pay proposal could benefit as many as 15 million American workers.
“Obviously, it’s going to put more money in their pocket,” Flemming said.
“We at the labor movement think that President Obama and the Department of Labor have taken really the first, very first, important step to ensuring that workers get paid for the work they do,” he said.
But critics of the proposal, like the U.S. Chamber of Commerce, believe the rule change will hurt businesses and force smaller employers, like restaurants and stores, to cut work hours.
In a statement on its website, the chamber said the new overtime rules “will negatively impact small businesses and drastically limit employment opportunities. Additionally, many reclassified employees will lose benefits, flexibility, status and opportunities for advancement.”
“Actually it’s going to create jobs … at the end of the day it’s going to create jobs,” Flemming said.
He said the intention of the rule change is to “raise pay.”
“Wages have been flat for so long and company profits are as high as they’ve been. So I think this is really a first step about raising wages for everybody,” he said.
Flemming also predicted a number of industries will be impacted by the rule change, including health care workers, whole sale and retail employees, and construction workers.
A 60-day comment period on the new overtime pay proposal ends in early September. If approved, the new rules could go into effect in 2016.
WABE’s April Williams, Rose Scott and Denis O’Hayer contributed to this report.
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