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Does Obama’s Overtime Pay Proposal Affect My Salary?

Obama Overtime Pay Proposal

President Barack Obama announced Monday night a proposal that would increase the salary threshold for workers who are paid overtime, according to a statement from the White House. The proposal, which will be handed down by the Department of Labor, would extend overtime pay to close to 5 million workers.

Obama’s Overtime Pay Proposal Doubles Overtime Salary Limit

In a Monday op-ed for the Huffington Post, President Obama wrote, “Right now, too many Americans are working long days for less pay than they deserve. That’s partly because we’ve failed to update overtime regulations for years. And an exemption meant for highly paid, white-collar employees now leaves out workers making as little as $23,660 a year — no matter how many hours they work.”

The new proposal to extend overtime would raise the salary threshold at which employees automatically qualify for time-and-a-half overtime pay from $23,660 to $50,440. Currently, many white-collar employees making more than $23,660 annually — which is below the federal poverty line for a family of four — don’t qualify for overtime due to their classification as exempt employees, as pointed out by Obama.

With the new overtime salary limit, overtime regulation will get back on par with where it was in 1975 in terms of buying power, reports The New York Times. The Obama overtime pay proposal requires no approval from Congress and falls under the executive branch’s regulatory powers.

Related: 7 Paycheck Laws Your Boss Could Be Breaking

Are You Affected By Obama’s New Overtime Rules?

The Obama administration estimates that these new overtime rules will affect 4.68 million people within the first year of implementation. Here’s how to know if this will affect you:

  • You are currently classified as an “exempt” employee due to the nature of your role
  • You are making more than $23,660 a year but less than $54,440

For example, even an exempt earner making just over the limit, $25,000 a year — around $12 an hour — would not have received overtime under the existing rules. Under the new salary limit bump, however, working even five hours of weekly overtime would result in $4,727 in overtime pay — wages the worker wouldn’t have qualified for or received under current rules.

The White House also released a breakdown of which demographics will be most affected by the Obama administration’s overtime pay proposal. Of the 4.68 million affected workers, here are the most-affected groups by demographic:

  • Age: 43.9 percent (2.05 million) will be between 35 and 54 years of age.
  • Education: 39.7 percent (1.86 million) will have a Bachelor’s degree.
  • Sex: 55.8 percent (2.62 million) will be female.
  • States: California, Texas and Florida have the largest number of affected residents, while Arkansas, Florida, Oklahoma and Tennessee will have the highest percentage (more than 4 percent in each state).

Photo credit: tvnewsbadge / Flickr

This article originally appeared on Does Obama’s Overtime Pay Proposal Affect My Salary?

This article by Elyssa Kirkham first appeared on and was distributed by the Personal Finance Syndication Network.