It’s Time to Update Overtime

[ProSense]

It’s Time to Update Overtime

By ROSS EISENBREYJAN

<...>

The problem is that most presidential actions that could help significant numbers of middle-class workers do require congressional participation. But here’s one that doesn’t: raising the salary threshold for the exemption to the overtime rules of the Fair Labor Standards Act of 1938.

The act establishes that most workers, after 40 hours of weekly work, are entitled to be paid 1.5 times their regular wage — a.k.a., overtime. Hourly paid workers fall into this class, as do salaried workers who make less than a specified “threshold” amount. The idea is that employees in higher-status positions (executives, administrators, professionals) ought to be exempt from receiving the overtime premium...as with the minimum wage, which is not automatically adjusted for inflation and tends to lose real value unless it is raised, the overtime exemption threshold generally languishes. That means that many people who once would have been paid 1.5 times their wage when working overtime are not, violating the spirit of the law.

For decades, the Department of Labor periodically updated the overtime salary threshold. But today’s threshold, at $455 a week, is far below historical levels in real terms. And at just $2 a week more than a poverty-level income for a family of four, it is indefensibly low. I propose that President Obama raise the threshold to $970, equal in today’s dollars to the 1975 level of $250.

<...>

Why do I suggest an updated 1975 value of $970? Because it would restore the proper relationship between the overtime salary threshold and today’s median wage. When the Ford administration raised the threshold in 1975, it was 1.6 times the median wage. Today’s median wage for 40 hours of work is about $670. Were we to update that value by the same 1.6 ratio that prevailed in the mid-1970s, we’d end up with a threshold above $1,000, suggesting that $970 is, if anything, on the low side.

- more -

http://www.nytimes.com/2014/01/11/opinion/its-time-to-update-overtime.html

[treestar]

1. kick

[ProSense]

2. Kick! n/t

[abelenkpe]

3. Do it!

I would be shocked and elated if this happened.

[ProSense]

4. Add this on the minimum wage

Obama weighing executive action on minimum wage?

By Greg Sargent

Here’s some welcome news. At his meeting with Democratic Senators last night, President Obama indicated that he is giving serious consideration to executive action designed to raise the minimum wage for employees of federal contractors...Proponents want to see this executive action happen on the merits — they believe it could impact as many as two million employees of federal contractors, and would help the economy. But they also believe such action could give a boost of momentum to the push for a minimum wage hike for all American workers, which obviously would require Congressional approval, but is currently facing Republican opposition.

Senator Bernie Sanders told me in an interview that the president took the idea very seriously when asked about it last night.

“I am very pleased that the president and members of his administration indicated they’re giving very serious consideration to this proposal,” Sanders said. “The president is weighing the pros and cons in terms of the impact on the overall debate.”

Asked what “cons” the president had identified, Sanders declined to say, noting that this had been a private meeting. But it seems fair to speculate that Obama, like some others, could be worried that raising the minimum wage for employees of federal contractors could be counter-productive, sapping momentum in the broader debate over whether to raise the minimum wage for all workers, by allowing opponents to argue that some have already been helped.

- more -

http://www.washingtonpost.com/blogs/plum-line/wp/2014/01/16/obama-weighing-executive-action-on-minimum-wage/

An August 2013 NYT editorial:

The Government as a Low-Wage Employer

By THE EDITORIAL BOARD

In 1965, in a nation torn by racial strife, President Johnson signed an executive order mandating nondiscrimination in employment by government contractors. Now, as President Obama has observed, the nation is divided by a different threat: widening income inequality. He could respond much as Mr. Johnson did — with an executive order aimed, this time, at raising the pay of millions of poorly paid employees of government contractors.


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Many laws and executive actions, mostly from the 1930s and 1960s, require fair pay for employees of federal contractors. But over time, those protections have been eroded by special-interest exemptions, complex contracting processes and lax enforcement. A new executive order could ensure that the awarding of contracts is based on the quality of jobs created, challenging the notion that the best contractor is the one with the lowest labor costs.

Mr. Obama also could tell federal agencies to conduct reviews of contracts to see if the work should be done in-house. There is compelling evidence that using private-sector contractors is often costlier than using government employees, even when contractors pay workers little.

Nearly 50 years after one executive order helped to end discrimination in government contracting, another one is needed to help ensure fair pay in that same sector.

http://www.nytimes.com/2013/08/13/opinion/the-government-as-a-low-wage-employer.html?_r=0

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So an executive action by President Obama is especially appealing. And while the President cannot unilaterally increase the minimum wage for everyone, he can change federal contracting procedures to favor contractors that pay their employees enough to live and raise a family on. This week, the New York Times published a powerful editorial calling on the President to do it. Drawing on a recent Demos study of low-wage contract employees and other federally-supported workers, as well as research from the National Employment Law Project, the Times made the case that:

Nearly 50 years after. . . President Johnson signed an executive order mandating nondiscrimination in employment by government contractors… (President Obama) could respond much as Mr. Johnson did — with an executive order aimed, this time, at raising the pay of millions of poorly paid employees of government contractors. . . challenging the notion that the best contractor is the one with the lowest labor costs.

Over at the Roosevelt Institute, Senior Fellow Richard Kirsch agrees, pointing out that “In the 1930s, and again in the 1960s, the federal government helped raise wages for workers. Congress passed laws and presidents issued executive orders that required businesses with federal contracts to pay their workers their industry’s prevailing wage. That meant better pay.”

Jared Bernstein, former economic advisor to Vice President Joe Biden, says this is an “an executive order whose time has come.” And while Dr. Bernstein apologizes for bothering the President while he’s on vacation, the truth is that many of the federal contracting jobs in question don’t come with paid vacation days anymore than they pay a living wage.

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http://www.demos.org/blog/8/16/13/yes-he-can-momentum-grows-executive-order-raise-wages-low-paid-contract-workers

[hfojvt]

5. should have been done long ago

although it seems more like "writing legislation" than "exectuting laws".

So Ford was the last one to raise it? It was never raised when Clinton was President?

It might be a moot point anyway. How many actual workers are working a salary for $25,000 - $50,000?

Maybe more than I think. Perhaps a whole bunch of restaurant managers

[glowing]

8. I am.

[hfojvt]

13. the question is - why?

Granted people work the job they have until they can find a better one, but I would simply NEVER even TAKE a job for a salary unless that salary was over $50,000.

But that's me. I'd rather make $20,000 a year for a 40 hour week than $40,000 a year for a 60 hour week.

What good is more money if you don't have time to enjoy it?

[glowing]

14. right to work state, meaning not many rights..

[TBF]

6. We can definitely agree on this. K&R nt

[PowerToThePeople]

7. I agree, it should be raised. But..

But, If I were making 50k/year (under the new proposed threshold) why wouldn't my boss/HR give me a 2k/year raise and then work me as much overtime as they want? Seems kind of arbitrary to me.

I would prefer overtime given to EVERY non-executive employee. So many salary jobs are labeled "management" but really are not.

This also could improve the employment rate. Now, they can work everyone 50-60+ a week and not pay any more. If they had to pay overtime, they would bring in an extra employee over paying the overtime.

[Flatulo]

10. I've been thinking the same thing. My wife's firm has lost four salaried people this year,

including one poor soul who went to the ladies room and dropped dead. She'd been working 70 hour weeks.

With all this attrition, you'd think they'd hire some replacements, right? No fucking way - the remaining people will just have to pick up the work of those who've left. It's truly maddening, and should be illegal. Working without pay is an outrage.

Thankfully I'm retired now, but all my former colleagues (engineering professionals) are working at least 60 hours per week. Meanwhile, no new workers are ever being brought in, unless it's as an unpaid intern (who never get hired anyway).

This country has completely lost it's soul.

[lumberjack_jeff]

9. Fully agree.

One of the best places to fix inequality and increase employment is in the FLSA laws. When it's more expensive to work two people 50 hours than three people 40 hours, employers hire.

Overtime should be much more expensive for employers than it currently is.

My Starbucks manager daughter-in-law works tons of overtime, none of which is she paid for.

[Flatulo]

11. Food service outlets are just criminal about this. They pay some poor kid $25K, call them a

manager, and then work them for 80 hours. This should absolutely be illegal.

[ProSense]

12. Yes. n/t