President Obama Monday said his administration has issued a regulation boosting the the threshold for time-and-a-half pay to kick in for workers making $50,440, up from $23,660, bringing it to 1975 levels.
The move is in the public-comment phase, doesn’t require any blessing or action from Congress, and would affect nearly 5 million Americans in 2016, including many retail workers.
Businesses and others, including the National Retail Federation, criticized the move as a costly measure that would make it harder for companies to employ people.
The president has spoken about the country’s need for this move in the past, and now he’s making good on his intention. Income equality has increasingly become an issue for voters, with many in the middle class struggling even as the economy improves.
“We've got to keep making sure hard work is rewarded,” President Obama wrote Monday in a published piece. “Right now, too many Americans are working long days for less pay than they deserve. That's partly because we've failed to update overtime regulations for years -- and an exemption meant for highly paid, white collar employees now leaves out workers making as little as $23,660 a year -- no matter how many hours they work.”
On its website, the NRF argues that the new regulation would take away managers' "ability to use their own discretion in deciding whether to put in the extra hours sometimes needed to do their job." The NRF also argues that the overtime expansion would "add to employers’ costs, undermine customer service, hinder productivity, generate more litigation opportunities for trial lawyers and ultimately harm job creation."
Although businesses are grumbling, the move brings the threshold to where it was in 1975. And many economists and retail experts believe that restoring some wealth and spending power to lower- and middle-income workers will actually benefit retailers in the long run.