Workers in the United States who earn less than $47,476 annually ($913 a week), of which more than 4 million exist, will now be qualified to get overtime pay when they work more than 40 hours a week. The new rule, criticised by employers, will come into force from December 1.
The rule had been approved by the White House in May 2016 by the Obama administration. Earlier, only workers who earned less than $23,660 annually earned overtime pay. The new rule was moved by the Obama administration to raise wages for working families.
The new Fair Labour Standards Act will benefit some by increasing pay for working overtime and for others it will provide more free time.
"Workers currently exempt are those who are paid on a salary basis, earn at least $455 per week, and are employed in a bona fide executive, administrative or professional capacity," said the US Department of Labour blog.
According to the new rule, overtime pay must be one-and-a-half times the regular pay for those working more than 40 hours and earning less than $47,476 annually. The $913/week threshold would be readjusted every three years according to changes in average wages. The threshold could be increased to $51,000 by January 1 2020, according to CNN Money.
The move, which now includes white collar workers, will affect 4.2 million workers in the US.
The problems to the new rule could be that pay may be increased to just a little above the threshold, noted CNN Money, or people would not be hired as full-time employees.
Retail and hospitality industry are most affected by the Fair Labour Standards Act rule.
The last time the threshold was increased was more than a decade ago, in 2004, and it only covered 7 percent of full-time salaried persons as opposed to 62 percent in 1975. With the current move, 35 percent of full-time salaried people will be protected by the new law.
