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Tags: overtime | pay | hours | workers | rule change | hillary

Hillary Praises Overtime Pay Plan as 'Win for Economy, Workers'

Hillary Praises Overtime Pay Plan as 'Win for Economy, Workers'
(Thomas Shea/Getty Images)

By    |   Tuesday, 30 June 2015 01:02 PM EDT

Democratic presidential candidate Hillary Clinton praised the plan by President Barack Obama to expand overtime pay to salaried employees.

Clinton wrote Tuesday on Twitter:

The Obama administration is proposing making up to 5 million more people eligible for overtime — its latest effort to boost pay for lower-income workers. These workers would benefit from rules requiring businesses to pay eligible employees 1 ½ times their regular pay for any work beyond 40 hours a week.

"We've got to keep making sure hard work is rewarded," Obama wrote in an op-ed published Monday in The Huffington Post. "That's how America should do business. In this country, a hard day's work deserves a fair day's pay."

Employers can now often get around the rules: Any salaried employee who's paid more than $455 a week — or $23,660 a year — can be called a "manager," given limited supervisory duties and made ineligible for overtime.

Yet that salary would put a family of four in poverty. Obama says that the level is too low and undercuts the intent of the overtime law. The threshold was last updated in 2004 and has been eroded by inflation.

The long-awaited overtime rule from the Labor Department would more than double the threshold at which employers can avoid paying overtime, to $970 a week by next year. The change would mean salaried employees earning less than $50,440 a year would be assured overtime if they work more than 40 hours per week.

Labor Secretary Tom Perez said Tuesday that the change would add $1.2 billion to $1.3 billion in wages for many newly overtime-eligible workers. Others, Perez said, will benefit from having additional hours. At the same time, he said, some employers may choose to hire new full-time or part-time workers to handle the work salaried workers had once performed.

A threshold of $984 a week would affect 15 million people, according to the liberal Economic Policy Institute. In 1975, overtime rules covered 65 percent of salaried workers. Today, it's just 8 percent, the White House says.

The White House's proposed changes will be open for public comment and finalized sometime next year.

Vermont Sen. Bernie Sanders, who is challenging Clinton for the Democratic nomination for president, said the proposal means businesses would no longer be able to shirk their responsibility to pay fair wages.

"This long overdue change in overtime rules is a step in the right direction and good news for workers," Sanders said.

Yet the proposals won't necessarily produce a big raise for the retail managers it aims to help, some say.

The National Retail Federation (NRF) says its members would probably respond by converting many salaried workers to hourly status, which could cost them benefits such as paid vacation. In a statement, the group said that it will hurt the career opportunities for those working in the retail industry.

"Turning managers into rank-and-file hourly workers takes away the career opportunities offered by private sector entrepreneurs and job creators that are the true path to middle-class success," said David French, senior vice president for government relations at NRF. 

The U.S. Chamber of Commerce also condemned the move, saying it "will not guarantee more income, but instead will negatively impact small businesses and drastically limit employment opportunities."

Daniel Hamermesh, an economist at the University of Texas, Austin, called the proposal "a job creation measure. Employers will substitute workers for hours, when the hours get more expensive."

The Associated Press contributed to this report.

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Democratic presidential candidate Hillary Clinton praised the plans by President Barack Obama to expand overtime pay to salaried employees working more than 40 hours a week.
overtime, pay, hours, workers, rule change, hillary
Tuesday, 30 June 2015 01:02 PM
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