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US Boosts Overtime Pay

  • Ken Bredemeier

FILE - An assembly worker works on 2015 Ford Mustang vehicles on the production line at the Ford Motor Flat Rock Assembly Plant in Flat Rock, Michigan, Aug. 20, 2015.

FILE - An assembly worker works on 2015 Ford Mustang vehicles on the production line at the Ford Motor Flat Rock Assembly Plant in Flat Rock, Michigan, Aug. 20, 2015.

U.S. President Barack Obama extended overtime pay benefits Wednesday for 4.2 million American workers, an attempt to increase the paychecks for employees who often work long hours without getting any extra money.

Obama’s order doubles the pay threshold at which U.S. companies have to pay overtime to employees who work more than 40 hours a week, from $23,660 to nearly $47,500.

Obama's directive could especially affect workers in fast food restaurants and retail stores, where employees who supervise other workers are often called managers, even if their salaries barely exceed that of their subordinates.

"If you work more than 40 hours a week, you should get paid for it or get extra time off to spend with your family and loved ones," Obama said. "It's one of the most important steps we're taking to help grow middle-class wages."

The White House estimated that the order could annually put $1.2 billion a year into the pockets of workers over the next decade.

But whether that actually occurs is unclear.

The National Retail Federation, a lobbying group for stores across the country, said the Obama order could force businesses to cut the working hours for some employees to 40 hours a week so they would not be required to make overtime payments, which in the U.S. is 1 1/2 times the normal pay rate for the first 40 hours of work each week. If that happens, workers would spend less time on the job, but not result in them getting any more money.

The White House said that under the old threshold, only 7 percent of U.S. workers qualified for overtime, a figure that will increase to 35 percent when the overtime requirement takes effect on December 1.

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