Obama Extends Overtime Pay To Millions Of Americans With Sweeping New Federal Rule

If the rule holds up, 4.2 million Americans will be affected.

The Obama administration just granted millions of American workers the opportunity for overtime pay in a move that may be its most effective yet at bolstering middle class incomes.

Under the new rule, any employee making less than $47,476 should receive time-and-a-half pay after working more than their designated 40-hour workweek, effectively doubling the current standard.

"Our whole mission here is about strengthening and growing the middle class," Labor Secretary Tom Perez told NPR. "In order to do that, we need to ensure that middle class jobs pay middle class wages."

Prior to this announcement, only seven percent of salaried Americans were receiving overtime pay when they worked extra hours. The amendment hopes to boost it to 35 percent, which is still a far cry from the 60 percent of Americans who received overtime pay in 1975. Since then, thanks to inflation and Bush-era policies, the number of Americans eligible for overtime pay has been on a steady decline.

So, who are the workers that will benefit most?

Set to go into effect December 1, 2016, barring a parry from Congress, the rule will boost the incomes of many retail stores and fast food workers who don't currently receive overtime pay, even if they work 60 or 70 hours a week. More than half of the estimated 4.2 million workers who will be affected are women, and 61 percent are aged 35 or older. 

Perhaps most importantly, a little more than 1.5 million of the workers who will see a boost in income are parents of children under 18. 

Vice President Joe Biden officially announced the new rule while speaking at a Columbus, Ohio ice cream store on Wednesday. 

"All of this goes back into the economy and grows the economy overall," Biden said, according to Bloomberg. "It has a rippling effect."

Cover photo: Alex Wong / Getty Images.


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