President Barack Obama is working overtime to give Americans a raise.
Congress has balked at his proposal to raise the minimum wage to $10.10 an hour, so the president is using his executive power to make more salaried workers eligible for overtime pay if they work more than 40 hours a week. On Thursday afternoon, Obama will sign an memorandum directing the Labor Department to revise the so-called "white-collar" exemption to overtime rules established by the Fair Labor Standards Act.
Under this exemption, workers who perform executive, professional or administrative duties aren't entitled to overtime pay unless their salary is below $455 a week. Obama contends that threshold, established in 2004, needs to be raised because that level of pay is below the poverty line for a worker supporting a family of four.
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The president also will direct the Labor Department to simplify overtime rules, because "employers and workers alike have difficulty navigating the existing regulations," according to a White House fact sheet.
That's funny -- that's pretty much what President George W. Bush said when his Labor Department revised overtime rules. Besides raising the threshold for automatic overtime pay, the 2004 rules revised the "duties" tests that defined whether workers should be treated as salaried employees vs. hourly workers.
These revisions made hundreds of thousands of workers ineligible for overtime pay, and labor unions and many Democrats opposed the changes.
Now it looks as if Obama will change these "duties" tests again, as well as raise the automatic overtime threshold.
Business groups see Obama's move as political -- there' s no need now to clarify vague rules, they say.
"This is not an issue that has been percolating – it has been a matter of settled law for 10 years and seems to be working," said David French, senior vice president for government relations at the National Retail Federation. "We think this is politically motivated."
The specifics of the new rules haven't even been proposed yet and will take a year or two before they would go into effect.
But French already is sure they "would have a significant job-killing effect."
"Employers who carefully considered the proper classification of their workforce 10 years ago would have to go through that process all over again, and would again be faced with uncertainty, administrative burdens and costs that are contrary to the goal of job creation," he said.
Workers, however, will benefit from the overtime revisions, said John Mahoney, chair of Tully Rinckey's labor and employment law practice group.
"People asked to work 50, 60 or more hours per week deserve to be compensated properly for their overtime," Mahoney said.
Since Congress isn't acting on raising the minimum wage, executive action to boost overtime pay is "a great alternative" to help the middle class, he said.
"Since 2009, corporate profits have risen sharply while wages have not kept pace, and it is time for our government to show leadership to help the middle class achieve a living wage."