Senate Democrats are looking to dramatically expand the number of people eligible for overtime pay, a change some say will impose a huge new cost that will fall disproportionately on the nation’s small businesses.
Sen. Tom Harkin (D-Iowa) and eight other Democrats proposed the Restoring Overtime Pay for Working Americans Act. Sponsors of the legislation estimate it would ensure that close to 50 percent of salaried workers receive overtime pay, up from the 12 percent who receive it today.
“Every worker deserves a fair day’s pay for a hard day’s work, but because our overtime laws are out-of-date, Americans around the country who work long hours away from their families are denied a paycheck that reflects that work. That hurts their families and our economy,” Harkin said.
“Plain and simple, if you have to work more, you should be paid more.”
Under current law, companies are required to pay workers overtime if they make up to $455 a week, which reflects a salary of about $24,000 a year. But Democrats say that income level hasn’t been adjusted in a decade, and their bill proposes a gradual increase to $1,090 a week.
If it became law, that would mean anyone making about $57,000 a year would be eligible for overtime pay.
The bill was offered just a few months after President Barack Obama asked the Department of Labor to consider raising the minimum weekly salary that is eligible for overtime pay. In May, the National Federation of Independent Business criticized the proposal as a costly idea that small companies would have difficulty implementing.
At the time, the NFIB said it expected that Labor was considering an increase to $800 a week, less than what Senate Democrats are seeking in their new bill. But even that smaller increase was seen as something that would pile on costs for small companies.
“Labor costs are already high for small businesses – the cost of providing wages and benefits for employees has skyrocketed and will continue to increase under Obamacare,” the NFIB wrote in May. “Like most government mandates on business, increasing the number of workers eligible for overtime will have a deep and disproportionate impact on the small-business sector.”
Harkin’s bill is supported by Sens. Barbara Boxer (D-Calif.), Sherrod Brown (D-Ohio), Bob Casey (D-Pa.), Pat Leahy (D-Vt.), Ed Markey (D-Mass.), Patty Murray (D-Wash.), Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.).