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By Joe Dolinsky

[email protected]

Casey

A new labor proposal from President Barack Obama seeks to raise the pay threshold for overtime eligibility, a radical change that could impact millions of American workers including 200,000 in Pennsylvania.

Currently, salaried workers earning less than $23,660 a year, or $455 a week, are automatically guaranteed time and a half after logging a 40-hour work week.

Obama announced this week he was aiming to more than double that threshold to those making under $50,440 per year by as early as 2016, expanding the number of overtime-eligible Americans from 8 to 40 percent, according to the U.S. Department of Labor.

The Department of Labor argues that the rules which establish overtime law haven’t evolved to keep up with spikes in cost of living. The current $23,660 threshold is considered poverty level for a family of four.

Pa. effects

The increase — only the second since 1975 — would affect 4.6 million workers nationwide, including 200,000 in Pennsylvania, according to data. Only Florida, Texas, California and New York have more affected workers.

Sara J. Goulet, Pennsylvania Department of Labor & Industry press secretary, said in an e-mail that the proposal would trump any current state laws.

“While Pennsylvania does have a law that applies to overtime, if a federal law is more generous then the more generous law, or in this case rule, applies here,” she said.

U.S. Sen. Bob Casey, D-Scranton, said in a statement Tuesday that raising wages for workers is key to giving Americans a fair shot in today’s economy.

“This executive order will have a substantial impact on wages for families across Pennsylvania and the nation. With this executive order the overtime income threshold will be brought into line with historic levels,” he said.

The change would also have a particular impact on the retail and restaurant industries, many of whom designate workers as “managers,” making them ineligible for overtime.

Business outlook

T.G.I. Friday’s franchise owner John C. Metz called the proposal “ludicrous.”

“It puts more of a hurt on small businesses already working in a tough market,” Metz said. “It doesn’t make sense to me.”

Metz said the decision was “above my pay grade.”

“We have very low turnover in our business,” he said. “We take care of all the benefit packages and we’re proud of what we do with our employee base.”

John Mellon, a business professor at Misericordia University, agreed that the action could potentially hurt small business owners in low population areas.

“They’re going to have to make their own rules,” Mellon said of employers. “A person isn’t going to work Thursday, Friday, Saturday and Sunday on a holiday weekend and not get paid time and half.”

Mellon said with a third of the population receiving Social Security checks, most companies aren’t doing anything to build loyalty.

“It’s going to help them financially but definitely not building up loyalty of employees,” he said.

“I don’t think its going to be a win-win for anyone,” he added.

Much like the executive order that raised minimum wage to $10.10, Obama will again turn to the executive order for his proposed overtime rule. That will mean congressional approval would not be required, however the order will be subjected to a 60-day public comment period.

Upon publication of the proposal, citizens will be able to submit written comments at www.regulations.gov. Those comments will be considered part of the rule-making record.

Obama plans to elaborate on the proposal Thursday in Wisconsin.

Joe Dolinsky can be reached at 570-991-6110 or on Twitter @JoeDolinskyTL