Obama proposes overtime pay for millions of Americans, critics say it will cost Hoosiers jobs

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INDIANAPOLIS (June 30, 2015) – Reaction is swift to a White House plan that could essentially give an instant raise to millions of Americans.

Critics, though, fear the new proposal would actually cost jobs.

President Obama said this week he wants to require overtime be paid to salaried workers who make up to $50,400 a year.  The new Labor Department regulation would more than double the current threshold, set at $23,660.

“It’s a positive step the president is making for us,” Shaunteka Campbell said, a retail worker in Indianapolis.

Campbell and Eugenia Johnson have publicly fought for better pay for retail workers statewide.

“I see a lot of our managers working overtime, and they’re just getting paid pennies,” Johnson said.

The rule would require an estimated 5 million Americans, many classified as managers, to receive time-and-a-half.

“Anytime you see something on a wage increase, I mean it’s going to open someone’s eyes,” Brett Voorhies said, president of the Indiana State AFL-CIO. “Whether you’re salary, whether you’re hourly, whatever the case may be, when you see a wage increase, you see dollar signs.”

Already, though, the proposal is sparking economic concern.

The National Retail Federation said Tuesday new overtime rules would undermine customer service and hinder productivity.

“We’re in the initial stages of reviewing it, but this dramatically changes our workforce,” Patrick Tamm said, president and CEO of the Indiana Restaurant and Lodging Association.

Tamm said the proposal could end up hurting the workers it’s meant to help, from the industry’s flexibility to career paths for restaurant and hotel managers.

“Well now will we do that or will we not?” Tamm said. “The market and our employers will have to make that decision, but it really changes that employee dynamic that folks really enjoy.”

GOP lawmakers on Capitol Hill say they’ll fight the proposal, but the change can be enacted by the president through regulations, bypassing the Republican-controlled Congress.

“The President has disguised this regulation as a tool to help workers,” Rep. Todd Rokita (R-Ind.) said in a statement. “In reality, it hinders businesses’ ability to expand and promote employees.”

The president plans to sell the plan during an event in Eau Claire, Wisconsin on Thursday.

“This has needed to be done for a long time,” Voorhies said.

The proposal will be open for public comment. The Labor Department said it hopes to have the rules finalized by next year.

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