Obama Will Give Workers A Boost By Making Sure More Earn Overtime Pay

[ProSense]

Obama Will Give Workers A Boost By Making Sure More Earn Overtime Pay

By Bryce Covert

Using his executive authority, President Obama will update labor regulations that dictate which workers are exempt from the requirement that their employers pay time and a half for working more than 40 hours a week, the New York Times reports.

Under current rules, workers can be classified as executive, administrative, or professional and denied overtime pay under what is known as the white-collar exemption. That means someone who oversees a clean up crew can be classified as executive and not be paid time and a half for extra work. Obama’s change would readjust the rules for which salaried employees can be blocked in this way.

It would also significantly raise the salary threshold that currently stands at $455 a week, or $23,660 a year, meaning anyone who makes more than that is exempt from overtime. That threshold hasn’t been significantly updated since 1975, allowing it to erode as inflation rose. In a paper released earlier this year, the Economic Policy Institute estimated that if that threshold were raised to $970 a week, covering those who make $50,440 or less a year, about 10 million salaried workers would get overtime pay for going over 40 weekly hours. “These workers include insurance clerks, secretaries, low-level managers, social workers, bookkeepers, dispatchers, sales and marketing assistants, and employees in scores of other occupations,” the report notes. That threshold is also where it would be if it had been adjusted for inflation since the last significant increase.

<...>

The change would bring a welcome boost in income for workers, who have suffered a decade of stagnant or falling wages despite rising productivity. Their wages are currently growing at the slowest rate since 1965 and they have declined 7 percent since 2007. Meanwhile, corporate profits have been robust, rising 20 percent between 2008 and 2013 and hitting an all-time high in 2012.

- more -

http://thinkprogress.org/economy/2014/03/12/3394571/obama-overtime/

It’s Time to Update Overtime
http://www.democraticunderground.com/10024351972

[okaawhatever]

1. K & R nt

[lumberjack_jeff]

2. This is where the problem is.

A 40 hour workweek was appropriate when labor was scarce, but it's not appropriate now.

This is a good start, but dialing back the work week to 32 or 36 hours is necessary.

[ProSense]

3. Yes,

"This is a good start, but dialing back the work week to 32 or 36 hours is necessary."

...the work week should be shortened and wages need to go up (increasing the minimum wage will facilitate this) for everyone working full-time.

There are people who want to work overtime, and they should be paid fairly. This is long overdue.

[Sgent]

4. I'm in favor of tightening the restrictions

on salaried workers, but this article is so bad that its hard to believe anything it says.

"significantly raise the salary threshold that currently stands at $455 a week, or $23,660 a year, meaning anyone who makes more than that is exempt from overtime."

The above line is patently false, the 23,660 is a number that is a minimum salary if the worker is salaried. Just because you make more than that, doesn't mean you can be considered an exempt worker. Further, "insurance clerks, secretaries, low-level managers, social workers, bookkeepers, dispatchers, sales and marketing assistants" this just adds to the incorrect information. Of those jobs listed, social worker's (professionals) and "low-level managers" (depending on the actual management they do) are the only ones eligible to be classified as exempt.

Microsoft was forced by the courts to give millions of dollars to computer programs who in today's money make ~90-120,000 / year. You have to be in an exempt occupation to be exempt from OT, not just make over a certain amount.

[ProSense]

5. It's

on salaried workers, but this article is so bad that its hard to believe anything it says.

"significantly raise the salary threshold that currently stands at $455 a week, or $23,660 a year, meaning anyone who makes more than that is exempt from overtime."

The above line is patently false, the 23,660 is a number that is a minimum salary if the worker is salaried. Just because you make more than that, doesn't mean you can be considered an exempt worker. Further, "insurance clerks, secretaries, low-level managers, social workers, bookkeepers, dispatchers, sales and marketing assistants" this just adds to the incorrect information. Of those jobs listed, social worker's (professionals) and "low-level managers" (depending on the actual management they do) are the only ones eligible to be classified as exempt.

Microsoft was forced by the courts to give millions of dollars to computer programs who in today's money make ~90-120,000 / year. You have to be in an exempt occupation to be exempt from OT, not just make over a certain amount.

...likely referring only to salaried, not hourly workers. Probably could have been stated a little more clearly. Here is the piece linked to in the OP.

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

[Sgent]

6. THe NY Times article is very good

and I agree with the author about raising it.

Its just that the TPM editorial was breathtakingly bad -- I would expect a payroll clerk to know better, much less a CPA, HR professional, or HR attorney (which obviously wasn't consulted).

The exempt salary requirement is too low; however, an employer cannot reclassify someone as exempt to get out of overtime unless that person already meets the "exempt" requirements, of which a minimum salary is just one.