4.2 million to become eligible for overtime pay

WASHINGTON — More than 4 million U.S. workers will become newly eligible for overtime pay under rules to be issued today by the Obama administration.

The policy changes are intended to counter erosion in overtime protections, which date from the 1930s and require employers to pay 1 1/2 times a worker’s regular salary for any work past 40 hours a week.

In the fast-food and retail industries in particular, many employees are deemed “managers,” work long hours, but are barely paid more than the people they supervise.

Under the new rules, first released in draft form last summer, the annual salary threshold at which companies can deny overtime pay will be doubled from $23,660 to nearly $47,500. That would make 4.2 million more salaried workers eligible for overtime pay. Hourly workers would continue to be mostly guaranteed overtime.

The White House estimates that the rule change will raise pay by $1.2 billion a year over the next decade. In addition, some companies may instead choose to reduce their employees’ hours to avoid paying the extra wages.

“Either way, the worker wins,” said Vice President Joe Biden on a conference call with reporters Tuesday afternoon.