The President will travel to La Crosse Wisconsin this afternoon to officially announce an update to the Fair Labor Standards Act that will go into effect next year.
President Obama: “This week, I’ll head to Wisconsin to discuss my plan to extend overtime protections to nearly 5 million workers in 2016, covering all salaried workers making up to about $50,400 next year. That’s good for workers who want fair pay, and it’s good for business owners who are already paying their employees what they deserve — since those who are doing right by their employees are undercut by competitors who aren’t.”
From La Crosse, Thursday afternoon:
(TRANSCRIPT ADDED BELOW THE FOLD)
On June 25, 1938, President Franklin Roosevelt signed the Fair Labor Standards Act to, in his words, “end starvation wages and intolerable hours”. In addition to establishing the first-ever national minimum wage (a modest 25 cents per hour), the FLSA enshrined the 44-hour work week, later reduced to 40, mandating time and a half overtime pay for anything beyond.
But the overtime regulations haven’t been meaningfully updated in decades. An exemption from overtime eligibility originally meant for highly-compensated, white-collar employees now applies to workers earning as little as $23,660 a year — below the poverty line for a family of four. In 1975, 62 percent of full-time salaried workers were eligible for overtime pay; but today, only 8 percent of full-time salaried workers fall below the salary threshold and are automatically eligible for overtime pay.
Today, 77 years and five days after FDR signed overtime pay into law, President Obama announced the release of a new proposed rule that, once final, would extend overtime protections to roughly 5 million workers. As proposed, it would set the new salary threshold at the 40th percentile of full-time salaried workers, projected to be about $970 a week (or $50,440 a year) in 2016, more than double its current level. And by automatically updating the salary threshold to keep pace with inflation or wage growth, the proposal would guard against erosion of overtime pay in the future and provide more certainty for businesses and employees.
(Full Department of Labor blog post below)