Obama Administration Greatly Expands Overtime Eligibility

Generally speaking, even salaried employees are automatically entitled to receive 1.5 their regular hourly rate so long as their annual salary falls beneath a certain threshold, currently $23,660, regardless of job duties or title. But on Monday night, President Obama announced in an op-ed Huffington Post article that he will direct the U.S. Department of Labor to issue new regulations raising the minimum annual salary under which an employer must pay overtime. The new regulations will raise the regular hourly rate, from $23,660 to $50,440 and will likely take effect in 2016. Caffarelli & Associates Ltd. applauds this move, which will benefit millions of low-wage workers nationwide. The overtime eligibility threshold has been frozen at $23,660 for years, a product of politics that failed to match the inflation. As a result, the regulations failed to live up to the purpose of the Fair Labor Standards Act, which is to help low wage workers balance work and family obligations, and to incentivize employers to hire more employees rather than working the existing ones harder, with the attendant benefits to the U.S. economy. By increasing the number of employees income inequality is reduced, which lowers the strain on social services and helps fund public assistance programs such as social security and medicare through increased payroll head counts. If you or someone you know has been denied overtime, or has been subjected to retaliation for demanding it, please contact us at www.caffarelli.com.

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