Obama Moves to Broaden Overtime Rights

Opponents cry foul, but millions may benefit

US President Barack Obama makes a statem
Brendan Smialowski/AFP/Getty ImagesPresident Obama addressing wage and overtime issues in 2011.
President Barack Obama has used his executive powers to order changes in the federal rules governing overtime pay for salaried workers. The changes in Labor Department regulations could lead to bigger paychecks for millions of salaried American workers.

The regulations, which have yet to be written (and won't take effect until at least 2015), would likely raise the salary threshold of workers who are eligible to receive overtime. They might also tighten the definition of supervisory workers who can be excluded from overtime payments.

As he signed the order, the president said, "Overtime is a pretty simple idea. If you have to work more, you should get paid more. Unfortunately today, millions of Americans aren't getting the extra pay they deserve."

Negative reaction to the plan was immediate, with Congressional Republicans accusing the president of once again taking unilateral action, and business leaders denouncing the proposal as a job-killer.

Exempt from Overtime

Hourly workers in non-management jobs are required by federal law to be paid time-and-half for hours worked beyond the 40-hour work week. An exemption excludes workers who spend as little as 5 percent of their work hours on supervisory tasks.

Through job title inflation that redefines their work as "executive, administrative or professional," many low-paid workers, such as convenience store managers, fast-food store shift supervisors and computer technicians, no longer get paid for working longer hours.

In fact, one White House official said, they may not even be making the minimum wage when their unpaid hours are taken into account.

Current Labor Department regulations require that salaried employees making less than $455 per week be paid overtime. At that level, even some workers whose incomes fall below the federal poverty level of $23,660 are not eligible for overtime pay.

Administration officials, speaking off the record, told The Washington Post that the limit could be raised significantly, to somewhere between $550 and $970. That would make about 10 million Americans newly eligible to receive overtime pay.

The salary threshold was last raised 10 years ago by President George W. Bush.

Betsey Stevenson, a member of the White House Council of Economic Advisers, told reporters at the White House on Wednesday that 3.1 million additional Americans would be eligible for overtime pay if the limit had been allowed to increase at the inflation rate.

"It's about time we addressed the unfair overtime laws in this country," said AOL Jobs resident employment advocate Donna Ballman. "Right now, the exemptions have so many loopholes that people making below the poverty level can be considered salaried exempt. The threshold of $455/week is outdated. Plus, the exemptions are so confusing that employers frequently get them wrong. If someone is making $25,000/year, they ought to get overtime for hours worked over 40 per week. Period."

A Job-Killing Effect?

House Speaker John Boehner, a Republican, criticized the president's proposed rule. "The president's policies are making it difficult for employers to expand employment. And until the president's policies get out of the way, employers are going to continue to sit on their hands," he told The Washington Post.

Business groups also were swift to react.

"Similar to minimum wage, these changes in overtime rules will fall most harshly on small and medium sized businesses, who are already trying to figure out the impact of Obamacare on them," Marc Freedman, executive director of Labor Law Policy for the U.S. Chamber of Commerce, told The Associated Press.

And the National Retail Federation put out a statement saying that the expansion of overtime pay "would have a significant job-killing effect."

But Cecilia Munoz, director of the White House Domestic Policy Council, told The New York Times, "We need to fix the system so folks working hard are getting compensated fairly."

The details are not expected to be released until later in 2014, and would not go into effect before 2015.

The president is already getting heat from Congress over another unilateral move, his executive order requiring that federal contractors pay a minimum wage of $10.10 an hour.

Obama also is pressuring Congress to raise the minimum wage for American workers to $10.10 per hour, from $7.25. That proposal is given little to no chance of passage by the current Congress.

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golfbird69

how can requiring overtime be a job killer.............obviously the company is doing well enough to need someone longer than forty hours........so if they have to hire another person , that doesnt sound like job killing to me.....

March 16 2014 at 11:07 AM Report abuse rate up rate down Reply
wbearl

This is another stupid idea from a guy who hasn't a clue what real life is like. I'm retired now, but worked in management for 31 years. If I hadn't worked 10 & 11 hours a day, someone else would have. That person would have gotten all the promotions. So when it comes time for Promotion, Raises or Bonuses who do you think the company will remember, the guy who just worked, or the guy who only worked if he got paid over time? Demand the OT Obama says you should get and see just how far you go.

March 15 2014 at 2:04 AM Report abuse +3 rate up rate down Reply
1 reply to wbearl's comment
What it do Cuz

Take it from someone else, i lost my overtime pay around 2007-2008, when added along with the percentage i lost in pay in 2008, and the lack of any raises. I figure I have lost 10,000 a year. It would be nice it be able to take care of my family with out having to kill myself with 60 hour work weeks just so I can make ends meet. so having my overtime back would be a big plus.and trust me my company is making a lot of money,they tell new hires they are making tons of money and then when it is time for raises we are told the company just does not have it sorry.

March 15 2014 at 2:36 AM Report abuse -1 rate up rate down Reply
Lisa

i lost my overtime pay around 2007-2008, when added along with the percentage i lost in pay in 2008, and the lack of any raises. I figure I have lost 10,000 a year. It would be nice it be able to take care of my family with out having to kill myself with 60 hour work weeks just so I can make ends meet. so having my overtime back would be a big plus.and trust me my company is making a lot of money,they tell new hires they are making tons of money and then when it is time for raises we are told the company just does not have it sorry.

March 15 2014 at 12:10 AM Report abuse -1 rate up rate down Reply
1 reply to Lisa's comment
golfbird69

they all have the same playbook......make money for the top execs who put in their overtime on the yacht or the golfcourse.......

March 16 2014 at 11:00 AM Report abuse rate up rate down Reply
Joseph

Someone please give the president an economics lesson

March 15 2014 at 12:07 AM Report abuse +3 rate up rate down Reply
DOUG

Well it seems instead of electing a President we appointed a King or worse, Dictator. Never mind the other branches of Government, I'll do what I like. Go ahead and raise the minimum wage. Those workers will get more in their pay. However, now the places they work will have to raise their prices to cover the new wages they have to pay. Nothing will change.

March 14 2014 at 11:36 PM Report abuse +2 rate up rate down Reply
Tom

Wonderful move. Worry about over time on minimum wage to $10 a hour jobs and keep the simple happy. How about the $30 a hour jobs that had left the country after Clinton had signed NAFTA? Oh thats right he was a liberal so we have to suffer and act like that never happened.

March 14 2014 at 9:48 PM Report abuse +2 rate up rate down Reply
The Canoli King

This is what OUR AMERICA get's when you put Curious George in charge. Even the man in the yellow hat had to go for therapy,but George's plan won't cover him.

March 14 2014 at 9:34 PM Report abuse rate up rate down Reply
Nonna

Obama won't be happy until all small businesses go under and the unemployed are totally dependent on the government. No wonder companies are now hiring only part timeworkers. It's the only way to survive BO and his "executive orders.'

March 14 2014 at 9:23 PM Report abuse +4 rate up rate down Reply
anrean

It is no surprise that Boehner and his cabal are against this. Perhaps they need to read the report issued by the INF this week that states income inequality is detrimental. At the least, the GOP and TP are consistent in trying to kill the middle class.

Per the article: "Negative reaction to the plan was immediate, with Congressional Republicans accusing the president of once again taking unilateral action, and business leaders denouncing the proposal as a job-killer."

March 14 2014 at 9:18 PM Report abuse -3 rate up rate down Reply
Dave

Who the hell in the federal government thinks they have the right to tell private companies that they HAVE TO PAY more than their contracted obligations. People take jobs knowing the salaries and stipulations that go with them. Salaried employees know they receive no overtime pay. If they don't like those arrangements they are free to move to other jobs that meet their requirements. Government should stay out of the private business affairs. The government's job is to protect us. Period! Make sure companies have proper working conditions. Make sure companies don't break illegal immigrant worker laws. make sure we're protected. Other than that, they have no business getting involved. And as for a "community Organizer" who never held a real job or ran anything. He should be the last person making statements of how businesses should operate. He is absolutely clueless and a disgrace to this nation.

March 14 2014 at 8:30 PM Report abuse +4 rate up rate down Reply

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