If you earn a salary, President Barack Obama wants you to make more money.
The U.S. Labor Department has finalized a new overtime pay threshold for people who work more than 40 hours per week.
Under the current rule, you’re only guaranteed time-and-a-half overtime pay if your yearly pay is less than $23,660.
The new salary threshold? $47,476.
The adjustment has been in the works since 2014, when the president announced a planned update to the Fair Labor Standards Act (FLSA). Until now, most white-collar workers receiving a set weekly salary — regardless of hours worked — have been excluded from overtime rules.
“It doesn’t make sense that in some cases this rule actually makes it possible for salaried workers to be paid less than the minimum wage,” President Obama said.
“If you’re working hard, you’re barely making ends meet, you should be paid for overtime. Period.”
What Does the Change Really Mean for Workers?
If you’re already working more than 40 hours per week, the added bonus of time-and-a-half pay could be a nice bump for your paycheck.
But your boss is going to have to pay the price.
Your employer could give you a slight raise to bump you out of the threshold, or require you to stick to 40 hours per week.
The worst-case scenario, according to CNN? Your boss could actually lower your pay to make up for the overtime hours you might put in.
As long as employees are paid at least minimum wage — according to state and federal laws — the federal government can’t say much more, lawyer Tammy McCutchen explained to CNN.
The final overtime rule comes in the midst of several states and cities considering a required minimum wage of $15. While a higher minimum wage may help close the wage gap and make it easier to live in pricy cities, a salary-plus-overtime option is still better in most cases.
For example, if you work 40 hours per week at $15 per hour, you still only make $600 per week before taxes.
So, When are We Doing This Thing?
Mark your calendar for December 1, 2016.
Starting that day, if you make less than $913 per week before taxes, your employer is required to pay you time-and-a-half for any hour worked over 40 in a single week.
The rule will get an update every three years. In 2020, the adjustment will be determined based on census and national salary data.
Vice President Joe Biden noted that 40 years ago, 62% of workers had overtime protection; today, only 7% do.
We’ll see what that percentage jumps to at the end of the year.
Your turn: Do you receive overtime pay? Will you receive overtime pay thanks to the increase threshold?
Lisa Rowan is a writer, editor, and podcaster living in Washington, D.C.