The White House today announced a long-awaited labor policy shift that will benefit some 4.2 million new workers who are now eligible for overtime pay, according to official estimates.
"If you work more than 40 hours a week, you should get paid for it or get extra time off to spend with your family and loved ones," President Obama said in a statement.
The new policy signals one of the Obama administration's boldest efforts to combat income inequality. And, similar to Obama's other recent policy moves on immigration and foreign policy with Cuba, it shows the president is willing to use executive action to sidestep an intransigent Congress, which in this case has been unwilling to increase minimum wage.
In short, the baseline salary for those eligible to receive overtime pay will be raised from $23,660 to $47,476—a move that will now expand overtime benefits to a substantial number of people in the middle class. The new policy also calls for a revision of that baseline every three years, assuming the next administration doesn't repeal the initiative.
That baseline level has been adjusted for inflation only once since 1975, when President George W. Bush did so in 2004 thanks in part to pressure from employers.
The result is that fewer and fewer workers have been eligible for overtime pay. In 1975, an estimated 60% of workers were eligible for overtime, as opposed to 6% today, according to the White House analysis.
Overtime protections are currently limited mostly to lower-income workers. In a call with reporters, Vice President Joe Biden applauded the move as "restoring and expanding access to the middle class," which he called "the defining issue of our time."
The new policy, in part, seems to acknowledge what labor groups have been saying since the advent of mobile technology: digital tools that were supposed to make middle class jobs more efficient are actually make it harder to log-off the job and enjoy some down time.
Some warn the move to expand overtime could have a negative effect on the economy over time.
"Economic theory and empirical evidence strongly suggest that, over time, employers will react to these new rules by cutting base salaries or laying off workers covered by the rules," according to an academic analysis of the proposed rules by George Mason University. "The proposed rules may force newly underemployed employees to instead choose to take a second job."
But public opinion is mostly for overtime protections. A Public Policy poll released last year found that 65% of Americans favor overtime pay for people earning salaries up to $75,000, which goes much further than the new rules.
"This is a step in the right direction," said Obama in his statement. "Americans have spent too long working long hours and getting less in return."
Daniel Rivero is a producer/reporter for Fusion who focuses on police and justice issues. He also skateboards, does a bunch of arts related things on his off time, and likes Cuban coffee.