The Obama administration has proposed expanding overtime pay to more workers. Right now, anyone earning up to $23,660 dollars a year is eligible for overtime. The government is now pushing that threshold to those earning up to $50,440.
The new law will expand overtime pay to millions of workers each year. The U.S. Labor Department justifies the income raise as a means to keep up with the cost of living.
Of course, media headlines have lit up with pros and cons about the changes. The worse that could happen is that companies will now have to pay out more to compensate their workers. The best that can happen is that millions of workers won't be forced into needless overtime because their bosses send them home on time to avoid paying out more in payroll expenses each year.
Whatever the criticism is, more pay for workers at a time when many are not earning enough is a positive thing for the economy. You would expect those that earn more to spend more, and that in turn creates more money flowing through the economy. A new survey by Bankrate.com suggests that those who earn more also wind up saving more as well.
The overtime changes will also help women, especially single mothers who were otherwise working more hours without any additional compensation.
The new changes are expected to hit in 2016 and become even more important as advocates fight to raise the minimum wage. Expect bro-business advocates to use this as an excuse to downplay the importance of paying American workers their worth.