Overtime proposal expected to benefit 5 million U.S. workers, 160,000 Ohio workers

Staff/wire report

YOUNGSTOWN

The White House says a new overtime rule proposal will benefit about 5 million U.S. workers including 160,000 Ohio workers.

The rule would more than double the threshold at which employers can avoid paying overtime, to $970 a week by next year.

That would mean salaried employees earning less than $50,440 a year would be assured overtime if they work more than 40 hours per week.

“We’ve got to keep making sure hard work is rewarded,” President Barack Obama wrote in an op-ed published Monday in The Huffington Post.

“That’s how America should do business. In this country, a hard day’s work deserves a fair day’s pay.”

Employers can now often get around the rules: Any salaried employee who’s paid more than $455 a week — or $23,660 a year — can be called a “manager,” given limited supervisory duties and made ineligible for overtime.

Obama says that the level is too low and undercuts the intent of the overtime law. The threshold was last updated in 2004 and has been eroded by inflation.

To keep up with future inflation and wage growth, the proposal will peg the salary threshold at the 40th percentile of income.

With the higher threshold, many more Americans — from fast food and retail supervisors to bank branch managers and insurance claims adjusters — would become eligible for overtime. Other changes the administration may propose could lead more white-collar workers to claim overtime.

A threshold of $984 a week would cover 15 million people, according to the liberal Economic Policy Institute.

U.S. Sen. Sherrod Brown, a Democrat from Cleveland, was a part of a group of 25 senators to increase the overtime pay threshold to include workers earning $1,090 per week.

“While wages for American workers have stagnated, hours spent on the job have increased,” Brown said in a statement. “When workers put in the extra time, it should be reflected in their pay. ... This will lift up our middle class and boost our economy.”

U.S. Rep. Tim Ryan of Howland, D-13th, also felt the overtime rules were overdue for an update.

“This overtime rule is an important step in rebuilding the middle class and I commend the president for his bold actions to make the economy work for all Americans,” Ryan said in a statement.

U.S. Rep. Bill Johnson of Marietta, R-6th, called the overtime proposal a “one-size-fits-all Washington mandate” that only benefits certain groups and could have a “devastating impact on workers and businesses.”

“Rather than implementing policies that encourage more part-time jobs and put more pressures on employers, the president and his administration should be striving to create a healthy economy, one that increases opportunities for all Americans, and that would result in rising wages for all full-time workers,” Johnson said in a statement.

The White House’s proposed changes, which will be open for public comment and could take months to finalize, can be enacted through regulation without approval by the Republican-led Congress. Yet the proposals won’t necessarily produce a big raise for people.

The National Retail Federation, a business group, says its members would probably respond by converting many salaried workers to hourly status, which could cost them benefits such as paid vacation. Other salaried workers would have their hours cut and wouldn’t receive higher pay.

Businesses might hire additional workers to avoid paying overtime or extend the hours they give part-timers. Yet supporters of extending overtime coverage say they would welcome those changes.

“It’s a job creation measure,” said Daniel Hamermesh, an economist at the University of Texas, Austin. “Employers will substitute workers for hours, when the hours get more expensive.”

The Youngstown/Warren Regional Chamber did not return a request for comment for this story.