Trump administration close to making more US workers eligible for overtime pay
The Labor Department is set to finish a rule expanding overtime pay as early as next month, The Wall Street Journal reported on Thursday, citing people familiar with the matter. The administration is expected to raise the pay threshold that determines which workers are exempt from overtime.
The current threshold is $23,660 – meaning workers who do not earn at least that much are expected to be paid overtime. The rule will lift that threshold to around $36,000, sources told the Journal.
Details, however, could still change before the Labor Department completes the final rule.
A spokesperson for the Department of Labor did not immediately return FOX Business’ request for comment.
Earlier this year, the administration issued a proposal to raise the pay threshold to $35,308, which would expand overtime pay to at least 1 million workers.
The Obama administration had previously proposed doubling the pay threshold to $47,476—which would have impacted more than 4 million people.
While the federal government works on its regulation, a number of states have already taken matters into their own hands by implementing statewide thresholds of their own.
California, for example, implemented a threshold equal to twice the state’s minimum wage – meaning it rises as higher minimum wage rates are adopted. This year, for example, the threshold for larger business is $49,920. By 2022, when the $15 minimum wage is adopted, it will rise to $62,400.
New York City’s overtime pay threshold of $58,500 took effect for businesses with 11 or more workers in December. For small business, with fewer than 11 employees, the adjustment will go into effect at the end of this year.
Massachusetts and Pennsylvania are working on policies of their own.
As previously reported by FOX Business, the overtime pay rules could negatively impact job creation and growth – or encourage businesses to adopt strategies to avoid rising costs. One way business owners could do that is by limiting the number of employees that work more than 40 hours per week. This could be done, for example, by hiring more entry-level people.
They could also raise salaries’ above the threshold, so employees no longer qualify for overtime.
Owners could alternatively decrease employees’ salaries, to offset the costs of more overtime pay.