Pros and Cons of Upping Overtime Threshold

With President Barack Obama’s latest overtime proposal, the debate over whether or not to increase the overtime salary threshold has come front and center.

In an op-ed published in The Huffington Post, Obama stated his plan to increase the overtime salary threshold from $23,600 per year to $50,400 in an effort to make fair the payment of workers.

The proposal has come under scrutiny, especially from businesses.

Here are the pros and cons of the plan to increase the threshold:

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PROS

1. More people could earn more money.

According to Politico, the proposal could affect as many as 10 million Americans, allowing them to automatically qualify for overtime pay and earn more money when they work more than 40 hours a week.

KOSU reported that the greatest benefactors would be people in tax preparation, real estate, food service managing, and financial specialists, earning a 12 percent raise on average for their 4.7 average overtime hours.

2. It could help shrink the gap between the wealthy and less wealthy in the country.

According to Gaebler.com, while increases in the minimum wage look to benefit the lowest-earning laborers, increasing the overtime threshold and pay work to economically advance the middle class.

CONS

1. It could affect hiring.

Opponents to the proposal voice a main concern that in a country with already high rates of unemployment and a sizeable population of those who have given up on searching for a job, this plan will further hinder prospects of hiring workers, Gaebler reported.

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2. Workers that qualify for overtime may have decreased hours.

Some speculate that managers and business owners will reschedule to give higher-paid workers more hours while employees who are paid less and may qualify for overtime get less scheduled hours.

3. Salaries may decrease.

If managers and supervisors become eligible with the increase in the salary threshold, their time-and-a-half pay may cause their salaries to decrease in order to compensate for the extra cost, according to FOX Business.

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