Some Americans may see more money in their paychecks soon
WASHINGTON, D.C. -- As many as 5 million Americans could get a raise under a plan the president announced today to make more people eligible for overtime pay.
Right now, Americans who make more than $23,660 per year for their 40-hour work are not eligible for overtime pay. Under the new Labor Department rule, that salary cap would be raised to $50,440 per year.
That's the first overhaul of the overtime rules since 1975.
Richard Trumka is president of the AFL-CIO.
"When you put more money in the pockets of workers, businesses get new customers and when they get new customers there's new demand and that new demand creates jobs and that's what this is likely to do," he said.
Jamie Richardson, vice president at fast-food chain White Castle, disagrees.
"We know it costs us $8-12 million more per year. As a family owned business, $8-12 million is a lot of money," he said.
Richardson says the new regulation will hurt workers as companies try to keep labor costs down.
"It's gonna make it really difficult for those general managers who want to get to the next level - who through their own hard working spirit and desire to achieve are told now 'Geez, we really can't have you do that,' we need you to just work 35 hours a week or just 40 hours a week," he said.
For the first time, the federal wage level for overtime pay will be adjusted for inflation each year. The administration estimates business will now pay $1.2 billion in wages they were not paying before.