DETROIT (WWJ) -- Michigan Gov. Gretchen Whimer is looking to expand the number of Michigan workers who are eligible to receive overtime, a move she says will grow the state's middle class.
Whitmer, speaking at a news conference at the Peacock Room in Midtown Detroit Thursday, says the plan would expand the right to overtime for about 200,000 Michigan workers. She says she has directed the state's Labor and Economic Opportunity Department to begin the rulemaking process.
According to Whitmer, 43% of Michigan households "struggle to just afford the necessities of life."
"I'm talking about housing and putting food on the table, healthcare and transportation," Whitmer said. "A family of four needs an annual salary of over $61,000 a year just to afford these basic necessities of life."
Once Whitmer's request for rulemaking is submitted, the process to finalize an overtime rule could take between 8 to 12 months.
The new rule is expected to set the threshold for overtime eligibility at $51,000 -- the same as a previously proposed rule by the Obama administration -- though that number has not been finalized. The threshold goes beyond the new rules set by the Trump administration, which are set to begin in January, that would expand the threshold to about $35,500 a year. Workers would earn at least 1.5 times their pay for any time worked over 40 hours in a week.
"If the Obama administration threshold was calibrated for today's economy, it would be about $51,000 a year. The ALICE determination is that for a family of four, they need to make over $61,000 a year. So I would anticipate that it's in that ballpark, but I'm not going to judge it. This is the beginning of the rule-making process," Whitmer said, referencing the United Way's ALICE report on financially struggling households.
As it currently stands workers who make more than $23,600 a year do not qualify for overtime pay.
Some workers are exempt when it comes to overtime pay, per U.S. Department of Labor rules.
Jeff Donofrio, head of the Department of Labor and Economic Opportunity, says studies and data show the expanded overtime protections would have a positive impact on the community and the economy.
"A Goldman Sachs study and the data that we have says that this is a net positive for the economy and it's a minimal impact to businesses. So we think this is going to be a real win for Michigan.," Donofrio said Thursday.
Rachel Lutz, who owns the Peacock Room, the retail clothing store where Whitmer held the news briefing Thursday, says she's on board with the idea.
"These are very physically laborious jobs. This usually effects retail and restaurant workers. These are the people who literally are the backbones of service," Lutz said.
