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Obama seeks overtime rules revamp that could help 5 million workers

June 30 The Obama administration on Tuesday
unveiled details of a long-awaited proposal that would make
nearly 5 million more U.S. workers eligible for overtime pay,
but many businesses say it would force them to cut hours and
wages.Under the proposal, the maximum income a salaried worker
could earn and still be eligible for mandatory overtime pay
would rise to $50,440 from $23,660, the first significant change
in four decades.U.S. Labor Secretary Thomas Perez said millions of workers
would earn an estimated $1.3 billion in additional wages
annually. Others would work less hours for the same amount of
money, and many

class="StrictlyAutoTagAnchor" href="" title="View all articles about businesses here">businesses would create new part-time positions
to fill the gap, he said.”By updating the salary threshold to keep pace with
inflation and wage growth, this proposal guards against future
erosion of overtime protections while providing certainty for
businesses,” Perez said during a telephone press conference.

The proposal would touch nearly every sector of the U.S.
economy, with the biggest impact on retail, hospitality and
restaurants.Industry groups say businesses will cut worker hours, demote
managers and potentially cut wages in response.”There simply isn’t any magic pot of money that lets
employers pay more just because the government says so,” said
David French, vice president of the National Retail Federation.

The move drew praise from left-leaning groups and Democrats,
including 2016 presidential candidate Hillary Clinton, who in a
tweet called the proposal “a win for our economy and workers
nationwide.”Many observers expected the proposal to include a narrowing
of an exemption from overtime pay protections for white-collar
workers based on the percentage of time they spend on management
tasks. Instead, Perez said, the administration will use public
comments to decide whether to change the so-called duties test.

Groups supporting the proposed increase in the income
threshold were concerned many low-level workers misclassified as
managers would not benefit from the protections offered by the
new rule.The current proposal “threaten(s) to deny far too many
workers the overtime pay protections they deserve,” said
Christine Owens, executive director of the nonprofit National
Employment Law Project.The proposal would also index the income threshold so that
anyone in the bottom 40 percent of earners would be eligible for
overtime pay. The current threshold does not even cover the
bottom 10 percent, according to the Department of Labor.President Barack Obama first announced the move on the
Huffington Post website on Monday evening. The formal
publication of the proposal, expected on Thursday, will set off
a 60-day public comment period. The rule would take effect next

(Reporting by Daniel Wiessner in Albany, New York; Editing by
Jeffrey Benkoe)

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