A recent analysis shows 3.2 million women would become newly eligible for time-and-a-half pay under the Obama administration's new overtime proposal. Women of color and single mothers would be impacted the most by the proposed overtime policy, according to the research.
Women, particularly single mothers and women of color, would benefit the most from the Obama administration's proposal to expand worker access to overtime pay, shows a recent study by the Institute for Women's Policy Research (IWPR) and MomsRising.
Various salaried workers -- including executive, administrative and professional workers, such as retail supervisors and food service managers -- are currently exempt from collecting overtime pay if they make more than $455 per week, or an annual salary of $23,660. As part of the administration's proposed changes released in June, that overtime salary threshold would go up to $50,440, or $970 a week.
Under that higher threshold, the study finds an estimated 5.9 million workers, including 3.2 million women and 2.7 million men, would become newly eligible for time-and-a-half pay for hours worked beyond 40 hours a week. Those estimates are based on data from the Census Bureau's 2014 Current Population Survey Outgoing Rotation Groups.
The U.S. Department of Labor's proposed overtime rule, which is now in its public comment period, would disproportionately impact single mothers, women of color as well as female workers employed in service and administrative support occupations, according to the study.
Forty-four percent of single mothers who are currently exempt from overtime would become eligible under the proposed policy, as would 46 percent of black and 48 percent of Hispanic women workers.
By comparison, those figures were 32 percent for married mothers and 35 percent for white female workers.
"For those who currently work over 40 hours per week without premium pay, the proposed increase in the overtime salary threshold could make a significant impact on the economic security of these families," said IWPR President Heidi Hartmann. "Our analysis shows that women workers who are typically the most economically vulnerable to low earnings and high unemployment -- single mothers and Black and Hispanic women -- are the most likely to gain coverage and have the opportunity to earn more per week in overtime pay under the new rule."
With the higher overtime threshold, newly eligible women who work more than 40 hours a week could see their weekly earnings go up by an average of $227, though that's still $25 less than what the average man stands to gain, according to the study. Newly covered single mothers could earn up to $243 more per week. And for newly elibigle black and Hispanic female workers, the overtime policy could increase their weekly pay by as much as $244 and $254, respectively.
"With the estimated transfer of income to workers resulting from this proposed rule, especially to single mothers and black and Hispanic women, consumer spending should increase and with it economic growth," Hartmann noted. "But most importantly, increasing coverage for these women is critical if they are to achieve economic security and increase prosperity for themselves and their families."
Critics of lifting the salary level that triggers overtime pay argue it could hurt businesses and reduce work flexibility among salaried employees. Skeptics also claim that employers might cut their workers' regular wages to offset overtime pay.
"This is going to be especially difficult for small businesses in small markets where wages are commensurate with the cost of living," Beth Milito, senior legal counsel with the National Federation of Independent Business, said in a June statement responding to the administration's overtime proposal. "Promoting someone to manager is going to be an expensive proposition for many small businesses, and the result will be less mobility and fewer opportunities for workers at the bottom."