Obama Labor decree makes millions more eligible for overtime pay

For the first time since 2004, the federal government is changing the earnings threshold that governs who is eligible for overtime pay. Some Republicans and business advocates warn that the rules change could turn out to be a job killer. Judy Woodruff reports.

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    The federal regulations governing overtime pay are changing for the first time since 2004. The U.S. Labor Department says its final rule, issued today, will be a boon to middle- and lower-income workers. Business groups say, in fact, it's going to hurt those very employees.

    The new rule means another 4.2 million workers will be eligible for overtime pay. Vice President Joe Biden hailed the move at an event today in Columbus, Ohio.


    We have got to right this ship, and this is a very important piece of doing it, because millions of people are going to start to get paid, not more than they deserve, what they deserve. And mark my words. The benefit is going to be beyond the compensation.


    Under the change, the salary threshold to qualify for time-and-a-half pay goes from $23,660 a year to more than $47,000. The Obama administration says it will boost wages by $12 billion over the next decade.

    Thanks mainly to inflation, the number of full-time workers who currently qualify for overtime has plunged sharply, from 62 percent in 1975 to just 7 percent today. The restaurant and retail industries will see the greatest effects from the new regulation, and they're strongly opposed.

    David French is with the National Retail Federation.

  • DAVID FRENCH, National Retail Federation:

    By executive fiat, the administration is effectively demoting millions of workers from salaried exempt employment to hourly and likely hourly non-exempt employment. In the real world, these changes are not going to benefit the workers they are promising overtime to. This is really a bait and switch.


    Some university officials have also warned they may have to raise tuition or scale back services to abide by the new guidelines.

    And in a statement today, Republican House Speaker Paul Ryan vowed to fight the overtime rule. He said — quote — "This regulation hurts the very people it alleges to help. Many small businesses and nonprofits will be unable to afford skilled workers and be forced to eliminate salaried positions."

    The rule takes effect December 1. After that, the salary threshold will be automatically updated every three years.

    We will have an interview with the secretary of labor right after the news summary.

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