President Barack Obama has already invested much of the midterm election year strategy to a minimum wage hike. Now, in what might play into the broader strategy of appealing to employees, the president wants to expand overtime pay.
Obama Looking to Force Businesses to Pay More Overtime
President Barack Obama is greeted after arriving on Air Force One at John F. Kennedy Airport in New York, Tuesday, March 11, 2014. Obama is in New York for a pair of fundraisers for the Democrats. (AP/Craig Ruttle)
Without congressional authorization, Obama will direct the Labor Department to change the classification of workers such as fast-food restaurant managers, loan officers, computer technicians and others currently classified as “executive or professional” employees, which provides a means for employers to avoid overtime pay, the New York Times reported.
TheBlaze asked Betsy Stevenson, a member of the White House Council of Economic Advisors, whether an overtime rule would affect more heads of household earners than a minimum wage hike.
“We really have to study the affects of the overtime rule to figure out how we would change,” Stevenson told TheBlaze. “Then of course how we change it determines who would be affected. So I couldn’t answer that question unless I could say how we were going to change the rule.”
Under current regulations, employees classified as executive, administrative or professional can be denied overtime pay under a “white-collar exemption,” the Times reported. Employers are prohibited from denying time and a half overtime pay to salaried workers earning less than $455 per week. Under the new rules, fewer salaried employees could be blocked from receiving overtime pay.
Taking questions from reporters, Stevenson said the White House is not putting forth a threshold at this point.
“What we know right now is that the threshhold has been eroded by inflation, and there are 3.1 million people who if the threshold had kept up with inflation, would automatically be covered by overtime provisions,” Stevenson said.
“What we’re going to be doing in the weeks and months to come is looking deeply at this problem and making sure that the overtime provisions are working as well as they should in today’s economy,” Stevenson continued. “We don’t know what that’s going to lead us to. We’ve got to do the work. We’ve got to dig into it and make sure we’re getting feed back from all key stakeholders and figuring out what’s going to be the best way to modernize this rule.”
This is also another chance for Obama to use executive authority, which he has promised to do more of since January’s State of the Union address and touting his “pen and phone” as avenues around congressional action.
While a minimum wage hike from $7.25 to $10.10 must be approved by Congress, Obama signed an executive order requiring all federal contractors to pay at least $10.10 per hour to employees working on federal contracted work.
Obama’s authority to act unilaterally on the overtime matter comes from the president’s ability to revise the rules that carry out the Fair Labor Standards Act, administration officials told the Times.
In 2004, the Bush administration’s Labor Department loosened the regulations to give businesses more latitude in exempting salaried white-collar workers from overtime pay.
Marc Freedman, the executive director of labor law policy for the U.S. Chamber of Commerce, said the nation’s overtime regulations “affect a very wide cross section of employers and our members,” and said, “I expect this is an area we will be very much engaged in.”
(This story was updated to include comments from Betsy Stevenson, a member of the White House Council of Economic Advisors.)