More Workers To Be Paid For Overtime
This week President Obama is asking the Labor Department to adjust its federal regulations so that millions of workers who were previously blocked from overtime will now qualify to be paid time-and-a-half for extra hours they work. This will not make Congress or the business lobby very happy, but The President has the authority to change this sort of thing via his executive power to revise the Fair Labor Standards Act, passed in 1938. The Times has more on this:
Under current federal regulations, workers who are deemed executive, administrative or professional employees can be denied overtime pay under a so-called white-collar exemption.
Under the new rules that Mr. Obama is seeking, fewer salaried employees could be blocked from receiving overtime, a move that would potentially shift billions of dollars’ worth of corporate income into the pockets of workers.
Currently, employers are prohibited from denying time-and-a-half overtime pay to any salaried worker who makes less than $455 per week. Mr. Obama’s directive would significantly increase that salary level.
In addition, Mr. Obama will try to change rules that allow employers to define which workers are exempt from receiving overtime based on the kind of work they perform. Under current rules, if an employer declares that an employee’s primary responsibility is executive, such as overseeing a cleanup crew, then that worker can be exempted from overtime.
In many cases state laws have higher caps for overtime exemption: California is $640/week and New York is $600, both thresholds are set to rise in 2016, to $800 and $675 respectively.
The $455 threshold hasn’t been changed since 2004, so inflation alone would warrant an adjustment.
The profits of the companies in the Standard & Poor’s 500 have doubled since the recession ended in June 2009, but wages have stagnated for a vast majority of workers in the same period. Recently, workers’ wages fell close to an all-time low as a share of the economy.
In 2012, the share of the gross domestic income that went to workers fell to 42.6 percent, the lowest on record.