The Obama administration has cheered the worker wins from a newly declared expansion of overtime pay and the directive has drawn a fierce backlash on Wednesday from the Republicans and the business community amid warnings that the move could backfire and hurt the workers in the end.
The policy changes formally which was unveiled on Wednesday would make more than 4 million U.S workers newly eligible for overtime pay and they are intended to counter erosion in overtime protections which requires employers to pay 1 ½ times a worker’s regular salary for any work past 40 hours a week.
Under the rules the first released in draft form last summer and the annual salary threshold at which companies can deny overtime pay will be doubled from 23,660$ to around 47,500$, that means a fast food manager who is making 14$ an hour or roughly 30,000$ a year would be now eligible for overtime for those extra hours.
The White House has estimated the rule change which will raise pay by 1.2 billion$ a year over the next decade and in addition some companies may instead choose to reduce their employees hours to avoid paying the extra wages and the VP Joe Biden on a conference call with the reporters has declared the rules at an event in Ohio.
