HARRISBURG, Pa. (WHTM) – Overtime pay may soon become a reality for more salaried workers in Pennsylvania.
The Obama Administration said Wednesday employers must pay overtime to workers making less than $47,476. The threshold is currently $23,660. This will affect 4.2 million U.S. workers.
The Pennsylvania Department of Labor and Industry says 185,000 workers in the state will now be eligible for time and a half for working more than 40 hours a week.
“A good example would be somebody maybe who is a retail manager and may be making a salary of say $40,000 a year. They’re working overtime, and they’re not being paid for that now,” said Sara Goulet, communications director for the PA Department of Labor and Industry.
A number of fast-food workers are also expected to be effected.
The White House reports only seven percent of full-time workers qualify for overtime now. That’s down from 62 percent in 1975. The changes mean 35 percent of salaried workers will be eligible. The new rule will raise pay by an estimated $12 billion over the next decade.
The Harrisburg Regional Chamber is worried about how this could affect the local economy.
“If people can’t manage the hours, the cost of doing business is going to go up, and that cost is going to be past onto the consumers that use those businesses,” said David Black, president and CEO of the Harrisburg Regional Chamber and CREDC.
ABC27 News got mixed reaction from people in Harrisburg.
“I think that if they were up the threshold, they should take a closer look at the income levels on a local basis as opposed to a national basis,” said Austin Barrett, who works in Harrisburg.
“Whether or not you get paid overtime should not be based off of salary in the first place. If you’re doing the overtime, you should get paid overtime,” Richard Myers said.
The PA Department of Labor says employers can either meet the new requirements, reduce hours, or raise salaried workers above the new threshold.
“We are all about fair labor, and we want people to be able to be paid fairly,” Goulet said. “This is an opportunity the federal government has taken under the Fair Labor Standards Act to ensure people who are working overtime are being paid fairly.”
Black said many state workers would fall into this category.
“There’s staff up there that are paid below this $47,000 and change, so they’re going to have to watch it too, or it’s additional cost to state dollars, and guess whose dollars are? It’s the taxpayer’s dollars,” Black said.
Pennsylvania Governor Tom Wolf likes the change and issued the following statement:
“I applaud the Obama Administration and the Department of Labor for extending overtime pay eligibility to millions of hardworking Americans. This new rule will help 185,000 Pennsylvanians, and as I have said, no one who works 40 hours per week or more should have to struggle to pay rent, put food on the table, or provide for their family. This rule will put more money in the pockets of middle-class workers and provide future protections and clarity. For too long, large sectors of our workforce have not been treated fairly or compensated appropriately for their work, and this action will provide the necessary economic security. This is an important step, but here in Pennsylvania we must do more, which is why I look forward to working with the legislature to increase the minimum wage to support workers and local businesses, create new jobs, and boost state revenue by more than $60 million annually.”
The overtime threshold was last updated in 2004. The new rules will go into effect on December 1.