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Business Community Expected To Protest Obama’s Call For More Overtime Pay

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DETROIT (WWJ/AP) – President Barack Obama is set to direct the Labor Department to strengthen overtime pay protections for millions of workers.

Bypassing Congress, Obama intends to order changes in overtime rules so employers would be required to pay millions more workers for the extra time they put in on the job.

The rules, which would not likely take effect until 2015, are aimed at workers currently designated as supervisory employees but who are exempt from overtime because they get paid a salary of more than $455 a week. Obama plans to order his Labor Department to recommend regulations that would increase that salary threshold and change the definition of what constitutes a supervisor.

The move is meant to help salaried workers, such as fast-food shift supervisors or convenience store managers, who may be expected to work more than 40 hours a week without receiving overtime pay.

Metro Detroit attorney, Patricia Nemeth, who represents employers, says a former president who ordered a similar directive faced opposition.

“A few years back, you know, President (George W.) Bush attempted to change the overtime regulations and the business community was concerned about the costs that this would cause to a lot of the employers,” Nemeth told WWJ’s Jon Hewett.

“So I think that you’re going to see a similar outcry from the business committees as to how much this is potentially going to cost employers in overtime,” she said.

Obama’s attention to overtime dovetails with his emphasis on correcting wage disparities, a theme that he has said will be central to the remainder of his presidential term. It also serves his political ends during a midterm election year, giving him a populist issue along with his calls for a higher minimum wage and better pay for women.

The president’s directive, to be announced Thursday, leaves the details of a proposed rule to the Labor Department, which is not expected to come up with a recommendation before the fall. Still, it drew swift protests from Republicans who complained he was sidestepping Congress and from the business community, who said such rules would increase burdens on employers.

The salary limit separating those who get overtime and those who don’t was increased to $455 in 2004 during the Bush administration. At the time, it hadn’t been increased since the mid-1970s.

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.

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.

TM and © Copyright 2014 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2014 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.

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