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Overtime Pay Threshold May Get a Boost Directly from the White House

A key item on the Obama Administration’s domestic agenda is to help the nation’s ailing middle class, which arguably has been losing ground for decades, and the widening income gap.

The President has lobbied since his first term for an increase in the minimum wage, on which Congress continues to drag its feet. Tired of waiting for lawmakers to act, a number of states and municipalities have instituted their own increases. And with the median U.S. household income of $54,100 (still $1,500 below 2007 levels), progressives and labor advocates in Washington are pushing for a sharp increase to the threshold at which millions of employees are eligible for overtime pay (over 40 hours per week). So reports Bloomberg.

Currently, some managers earning as little as $23,660 per year are not eligible for overtime. U.S. Labor Department (DOL) officials and many Democratic senators are pushing for $51,000 to be the threshold at which an employee may be exempt from earning overtime.

Among the sticking points from the business point of view is what constitutes a “manager” who wouldn’t typically be eligible for overtime pay. Corporate lobbyists see any attempt to raise the threshold as a surefire job-killer, a disincentive for companies to hire managers or pay overtime, and a threat to the country’s still-nascent recovery.

The paltry minimum salary level has been raised only once since 1975, by President Bush in 2004. President Obama is now contemplating raising the overtime-eligible threshold through an executive order. The change could mean a significant pay raise for an additional six million workers, according to the DOL.

Read the full article from Bloomberg.

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