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President Obama makes more workers eligible for overtime

A significant number of New York workers will potentially get a boost to their paychecks beginning on Dec. 1, thanks to an initiative by President Obama that will increase the number of people eligible for overtime pay.

According to estimates by the White House, 4.2 million American workers who now are excluded from overtime pay rates will be able to collect time-and-a-half rates for their efforts. Some estimates predict that even higher numbers of workers will be impacted by the increase.

The president announced the salary change just this week, and congressional Democrats anticipate that workers will now have the option of bringing home more money each check or enjoying more time off. Conversely, Republicans are prognosticating doom and gloom for the business community.

So just who will be affected by these changes? The salary threshold appears to be the determiner in this equation, as this figure sets the limit for overtime pay rights for workers, no matter what their job duties may be.

The premise of overtime is that all hourly workers are entitled to it, but salaried employees are on much shakier ground. Former President George W. Bush capped the salary threshold at $23,660, which means that today, only 7 percent of salaried employees are entitled to overtime pay rates. This is a great disparity when compared to the 62 percent of workers entitled to OT pay in 1975.

The Obama administration plans to more than double that threshold, upping it to $47,476, which represents the 40th percentile for salary rates in America's lowest-paying area -- the Southeast.

Potentially, all workers earning a salary in the range of $23,660 to $47,476 will now be eligible for OT. However, job duties also are a factor, most notably in the case of retail management. For example, a manager at a Dollar General who makes $35,000 but works as many as 60 hours each week and oversees staff can be denied overtime by the company. Other exceptions also apply.

Some employers play fast and loose with the rules, misclassifying workers as managers only by title to dodge OT payment regulations. Those alleging this type of misclassification may decide to take legal action and file suit against their employers.

Source: Huffington Post, "What Obama’s New Overtime Rules Mean For You," David Jamieson, May 18, 2016

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