The overtime threshold has made headlines recently with President Barack Obama’s proposal to increase the barrier.
Obama is discussing the overtime threshold, which sets the salary at which an individual is no longer paid for overtime, according to PBS.
In an op-ed in The Huffington Post
, Obama revealed his plan to increase the overtime salary threshold to $50,400.
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Currently, the threshold is $23,660, just below the poverty line for a family of four, PBS reported.
The proposed rule could affect millions of Americans, covering 12 percent of salaried employees, Politico noted
Hourly and some salaried employees who work more than 40 hours in a week may be eligible for overtime pay.
Under the FLSA, people who work in executive, professional, or administrative positions do not have to be paid overtime unless they perform a set of job duties.
The president’s proposal does not include regulatory changes to this “duties test.”
The FLSA was passed in 1938 and brought with it a national minimum wage and time-and-a-half pay for hourly and certain salaried employees for overtime hours, The Washington Post reported
Since then, the threshold has been increased at varying increments, but has not raised with inflation.
The Post predicted Obama’s proposed rule would come in the form of an executive order.
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While many have come out in praise of the plan as a way of increase income without raising the minimum wage, others worry employees could suffer if businesses cut individuals’ hours to avoid paying overtime.
Politico reported McDonald’s has already set up a system to notify managers when an employee is about to reach 40 hours of work.
Other businesses worry it will decrease employment all together.
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