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Millions More American Workers To Be Eligible For Overtime Pay

RENEE MONTAGNE, HOST:

Millions more American workers will soon be eligible for overtime pay under a rule being finalized today by the Labor Department. The rule says anyone who makes less than about $47,000 a year should receive time-and-a-half pay when they work more than 40 hours a week. The measure is one of the most sweeping moves the Obama administration has made in an effort to boost slow-growing incomes. It's facing huge opposition from some business owners though. Joining us in the studio now to explain the new rule is Labor Secretary Tom Perez. Good morning, Secretary.

TOM PEREZ: Good morning, Renee. Great to be with you and your listeners.

MONTAGNE: And good to have you. How many workers, and in what kinds of jobs, will be affected?

PEREZ: Sure. We estimate that there will be 4.2 million workers who will be directly affected. And these are workers who are currently ineligible for overtime because the current rule is really out of date. And these workers can make - they're making $24,000 a year working 70 hours a week. And what's interesting about that 4.2 million is that they are people with a college degree - more than 50 percent. More than 50 percent are women.

2.5 million children will be in a household that benefits from this. And then there's another 9 million workers, roughly, who are managers who are currently misclassified. That administrative assistant who makes $35,000 right now, works 50 hours a week - very important work, but doesn't do any supervisory work - so is entitled to overtime but isn't getting it, we estimate that there's about three-quarters of a million of those who are improperly being denied overtime. So a lot of people are going to get helped.

MONTAGNE: Well, let me just say this, clarify something you just said. This applies to people who are ineligible because the rule is out of date. And I would just say that it does double the threshold under which workers receive overtime. But when this rule went into effect in the 1970s, in today's dollars, that threshold was even lower than it is now. But let me say this. Not surprisingly, some business owners are unhappy with this. The National Retail Federation, for one, says the White House has gone too far. Take a listen to what David French has to say.

DAVID FRENCH: Change in the overtime rule does not mean more overtime pay. What our members have told us, what many other employers have told us is that there's not a golden pot of money out there sitting in employers pockets that all of a sudden they can pay a lot more in the way of overtime pay.

MONTAGNE: Now, that's the National Retail Federation. One thing they might do is, say, not authorize overtime.

PEREZ: Well, you know, the workers are going to benefit in three different ways, Renee. Some workers are going to get more money. And we estimate $12 billion over the next 10 years. Some workers are going to get the benefit of time because right now, there's so many workers who are working 60-70 hours a week. And they're basically working 20-30 hours for free.

It's not freedom to work for free. So they get the benefit of time. And all workers who are involved in this get the benefit of clarity. And that's what it's about. Because this rule is about vindicating and restoring two basic principles, which is that, middle-class jobs deserve middle-class pay. And when you work extra, you should get paid extra. That's what this is about. It's very simple, but it's very bedrock.

MONTAGNE: All right. Well, thank you very much for joining us.

PEREZ: Pleasure to be with you.

MONTAGNE: Tom Perez is the U.S. Secretary of Labor. Transcript provided by NPR, Copyright NPR.