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Trump Is Scaling Back Obama's Expansion of Overtime Pay

Alexia Fernández Campbell
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A four-year fight to expand overtime pay to millions of workers may soon be over. About 1.2 million workers will win and 2.8 million will lose.

The Department of Labor is scaling back an Obama-era rule that would have doubled the maximum salary for a worker to qualify for overtime pay, according to a proposed rule the agency sent to the Office of the Federal Register for public review.

With few exceptions, only workers who earn less than $23,000 a year can currently earn overtime pay under federal law. Overtime wages are defined as 50 percent extra hourly pay for employees who work more than 40 hours in a week.

In 2014, the Obama administration tried to double the threshold to include workers earning up to $47,000, tying future changes to the cost of living. The idea was that a dramatic expansion was needed because the government hasn’t raised the salary limit to keep up with inflation. For example, the $8,060 salary limit set in 1975 was the equivalent of about $50,440 in 2014— far above the current $23,000 threshold. That means that over the years, more and more Americans have been working extra hours without getting paid for them, which is exactly what federal labor laws meant to prevent.

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