President Obama to Finalize Overhaul of Overtime Rule, Boosting Pay for 4.2M Workers

The new overtime rules take effect on Dec. 1, 2016.

ByABC News
May 17, 2016, 8:05 PM

— -- The Obama administration is moving to finalize changes to double the salary threshold of workers entitled to overtime wages.

The Department of Labor is set to settle its overtime protections for workers on Wednesday, extending overtime to an estimated 4.2 million additional workers who are not currently eligible under federal law. The administration expects the action to increase wages for workers by $12 billion over the next decade.

ABC News reported on the proposed changes last summer, and this action finalizes the administration’s decision and tweaks the threshold.

“The middle class is getting clobbered, although I think we're making some real progress here,” Vice President Joe Biden said on a conference call with reporters Tuesday afternoon. “If you work overtime, you should actually get paid for working overtime.”

The final rule, which takes effect on Dec. 1, 2016, doubles the salary threshold -- from $23,660 to $47,476 per year -- under which most salaried workers are guaranteed overtime (hourly workers are generally guaranteed overtime pay regardless of their earnings level).

Additionally, this new level will be automatically updated every three years to ensure that workers continue to earn the pay they deserve, though hypothetically the 45th president’s administration could act to undo the rule.

Biden, who is scheduled to travel to Columbus, Ohio, on Wednesday to deliver remarks at Jeni’s Splendid Ice Cream Headquarters on the change, said that companies will “face a choice” to either pay their workers for the overtime that they work, or cap the hours that their salaried workers making below $47,500 at 40 hours each work week.

“Either way, the worker wins,” Biden said.

“Today we're a lot better positioned to lead the world because we've been laser focused on middle class economics,” he said, citing changes over the past seven years of the Obama administration to equal pay, advanced paid sick leave for federal contractors, college tax credits, expansion of Pell Grants, boosting EITC, and protecting the right of workers to bargain for fair wages, as well as its call for increase for minimum wage, which has not passed Congress.

"There's every reason to be optimistic about the future if only we seize the immense opportunities in front of us,” the vice president said.