Starting in December, employers will have to boost salaries, cut hours or start paying overtime to millions of managers and white-collar workers whose duties require them to put in more than 40 hours a week despite, in some cases, near-poverty-level pay.
That’s because of a new overtime rule the White House will release Wednesday. The rule could especially boost pay for managers and assistant managers in retail and restaurants, although industry groups say it could backfire with work-schedule cuts in some cases.
This will be the first update to overtime rules in 12 years. Vice President Joe Biden will go to Columbus Wednesday to promote it and the broader White House agenda — one he described Tuesday as “restoring and expanding access to the middle class.”
Under federal wage-and-hour laws, most workers must be paid 1.5 times their hourly salaries for every hour worked beyond 40. But there is an exemption for managers. Current rules, last updated in 2004, said that employers need not pay their managers overtime, regardless of how many hours they work, if they earn at least $23,660, or $455 a week.
The new rule will double the threshold to $47,476, or $913 a week. It will be adjusted for inflation every three years, with the threshold likely to go above $51,000 in 2020. Companies will be able to count bonuses and commissions, however, toward as much as 10 percent of the salary threshold.
This will result in more overtime protections for 4.2 million people, 133,756 of them in Ohio, and others should see more money in their paychecks as a result of clearer federal guidelines on how workers can be classified as either salaried or hourly, the White House said. It said the rule will boost wages nationally by $1.2 billion a year.
“The principle is real simple: If you are working more than 40 hours a week, you should get paid for working more than 40 hours a week,” Biden said on a conference call with reporters late Tuesday.
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