The Herald Bulletin

Evening Update

Breaking News

March 12, 2014

Obama wants overtime pay for more salaried workers

(Continued)

Overtime and minimum wage rules are set by law in the Fair Labor Standards Act that Congress originally passed in 1938. The law gives the administration some leeway to define the rules through regulations.

The law requires most workers to be paid overtime that is 1.5 times their regular wages if they work more than 40 hours per week. The law allows exemptions for executives, managers and professional workers and sets the salary threshold above which workers don't have to get overtime pay. The law also gives employers leeway to define workers as supervisors, and thus ineligible for overtime, even if they spend much of their work day performing non-supervisory work.

New rules would likely establish a minimum amount of managerial duties that a worker would have to carry out to be exempt from overtime.

While the White House would not say what threshold it was considering, economists allied with the White House have proposed doubling the current limit to nearly $1,000 a week, or about $52,000 a year, which, when adjusted to inflation would make it similar to what the threshold was in 1976.

Ross Eisenbrey, the vice president of the liberal Economic Policy Institute, said there are about 10 million more workers who would qualify for overtime under that higher threshold. But he said not all work overtime and he estimated that such an increase would more than likely actually affect about 5 million salaried workers.

The current salary limit —equal to $23,660 a year —is below the poverty level for a family of four. "It's so far from being an executive salary as to be a joke," Eisenbrey said.

Business groups said any forced increase in wages has consequences that could affect employment, prices and the survival of certain companies which, they said, already have to comply with requirements of a new health care law.

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