New overtime rules could raise pay for 132K N.J. workers

The rules, which take effect Dec. 1, would require overtime pay after a 40-hour work week for salaried employees earning up to $47,476 a year, or $913 a week, up from the current $23,660, or $455 per week. Hourly workers automatically are eligible for overtime no matter what their pay.

"The basic bargain was if you help increase the productivity of the outfit you worked for, you got to share in the benefits," Vice President Joe Biden said on a conference call with reporters to announce the new rules.

In June 2015, the Obama administration initially proposed raising the salary limit to $50,440 a year, or $970 a week. The final rule would affect 4.2 million workers and increase their pay by $12 billion over a decade. It was pegged to salaries in the South, where wages are lowest.

The figures will be updated every three years and the threshold is expected to exceed $51,000 with the first update on Jan. 1, 2020, the White House said.

Because the maximum salary was not raised for decades, the share of full-time salaried workers eligible for overtime has declined to 8 percent today from 62 percent in 1975, the Labor Department said.

Even as the economy under President Barack Obama added 14.6 million jobs over 74 straight months of growth following the Great Recession, wages largely have remained stagnant, Biden said.

"You wonder why the middle class is struggling," Biden said.

Business groups said the new rules will hurt, not help, employees.

"The pending changes are clearly excessive and will have sweeping negative consequences for employees," said David French, chief lobbyist for the National Retail Federation, in a letter asking the Senate Small Business Committee to try to block the rules.

"The department's one-size-fits-all rule will curtail career advancement opportunities, diminish workplace flexibility, damage employee morale and lead to a more hierarchical workplace," wrote French, whose group's members include Nieman Marcus, Macy's and Modell's Sporting Goods.

Senate Small Business Committee Chairman David Vitter (R-La.) expressed concern during a May 11 hearing on the overtime proposal that it would hurt workers rather than help them.

"It is very likely that employers will respond to higher overtime costs in several ways that will actually reduce workers' opportunity for long-term advancement and increased pay," Vitter said. "Many employees could see their hours cut or limited to less than 40 hours per week and lose the benefits that come with a salaried position, such as flexible work hours and health insurance."

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