Robert Reich, Labor Secretary under President Bill Clinton, supports the proposal to widen the eligibility for those who are able to earn overtime, calling it “finally, a bit of good news for hard-working Americans.”

He also disagrees with those who claim it will kill jobs.

The proposal would raise the maximum salary you can earn each year and still be eligible for overtime to $50,400 from $23,600. Overtime pay, of course, means you receive 1½ times your normal wages for any time worked beyond 40 hours a week.

"This is a big deal. Some 5 million workers will get a raise," Reich, now a public policy professor at University of California, Berkeley, writes on The Huffington Post.

"Business lobbies are already hollering this will kill jobs. That's what they always predict, whether it's raising the minimum wage, Obamacare, family and medical leave, or better worker safety. Yet their predictions never turn out to be true."

Reich predicts that the new rules will actually create jobs.

"That's because employers who don't want to pay overtime have an obvious option: they can hire more workers and employ each of them for no more than 40 hours a week." Higher overtime pay can help reverse the nation's growing income inequality, Reich says.

But many business groups are opposed to the change.

"The retail industry is concerned because the expected change in wage levels could bring many store managers or assistant managers under overtime rules, taking away their ability to use their own discretion in deciding whether to put in the extra hours sometimes needed to do their jobs," according to a statement from the National Retail Federation.

"And putting managers under overtime rules could undermine their status as career professionals rather than hourly workers."

In other labor news, the economy added 223,000 jobs last month and unemployment slid to a seven-year low of 5.3 percent. But the labor force participation rate fell to a 37-year low of 62.6 percent, and wages gained only 2 percent in the 12 months through June.

"The labor market is good, there’s just not any wage pressure," Joseph LaVorgna, chief U.S. economist at Deutsche Bank, told Bloomberg. "The disappointment is on wages and on the participation rate."

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