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Obama To Push Expanded Overtime Pay
Originally published on Thu March 13, 2014 7:44 am
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Today, President Obama will tell the Department of Labor to rethink the rules for how employers pay overtime. The president wants millions more people to get paid overtime, particularly those who are exempt. And by signing a presidential memo to the department, he doesn't have to ask Congress to make that happen.
NPR White House correspondent Tamara Keith reports.
TAMARA KEITH, BYLINE: Pam Griffith is a kitchen manager at a restaurant in Ohio. She says she works 55 or 60 hours a week, is always on call, and doesn't get paid overtime.
PAM GRIFFITH: It's exhausting.
GRIFFITH: You got to keep the kitchen running, you know. You got to keep the customers happy and you got to make the owners money.
KEITH: Griffith is the kind of person the president has in mind with this new move to rewrite the overtime rules. Cecelia Munoz is director of the White House Domestic Policy Council.
CECELIA MUÑOZ: We want to make sure that we're updating the rules so that they make sense, so that you get a fair wage for a hard day's work.
KEITH: Under the current rules, employees who are classified as exempt receive a salary and no extra pay for overtime. The exemptions were intended for so-called white collar workers - managers, executives. But in practice, it includes people whose jobs are far from executive level.
Ross Eisenbrey is vice president of the Economic Policy Institute.
ROSS EISENBREY: They can actually, under the current rules, work 95 percent of their time doing very menial things - like washing dishes or scrubbing floors, stocking shelves, serving customers - and yet be considered exempt executives.
KEITH: And they can make as little as about $24,000 a year. Eisenbrey presented a report last year to the Labor Department, arguing for a boost in that pay threshold. And he says he's pleased with this move.
EISENBREY: They've decided that they have to address this because the level currently so low that it's ridiculous.
KEITH: The overtime rules were last rewritten a decade ago under the Bush administration. And now Obama is taking this on as part of his income inequality agenda. Eisenbrey says it's not clear yet how the rules will be rewritten. But it is clear the administration will try to expand the number of people eligible to receive overtime pay.
EISENBREY: This is something that the president can do through his own executive power - he doesn't need Congress, you know, which is gridlocked and impossible.
KEITH: The administration's Cecelia Munoz says the current rules haven't kept up with inflation.
MUÑOZ: There's no economic reason that fewer workers should be covered by overtime every year, yet that's what's been happening. So it's overdue.
DAVID FRENCH: This is, I think, an ill-conceived rule at an ill-conceived time.
KEITH: David French does government relations for the National Retail Federation. He says this isn't an issue that had been percolating, crying out for a fix, as it was in 2004.
FRENCH: And that came really after years of concern that the rules were out of date, that there was a lot of uncertainty, there was a lot of litigation. This time around, most employers view this as very settled law. It's been very stable. There's not been a lot of comment, not been a lot of controversy here, so this was a surprise.
KEITH: And not a welcome one for Republicans. House Speaker John Boehner agreed with the criticism coming from the business community.
SENATOR JOHN BOEHNER: If you don't have a job, you don't qualify for overtime. So what do you get out of it? You get nothing. The president's policies are making it difficult for employers to expand employment. And until the president's policies get out of the way, employers are going to continue to sit on their hands.
KEITH: It will be a long time before the economic theories on this one can be tested. The rule-making process is expected to take more than a year, during which time both sides will lobby the Labor Department to sway the outcome.
Tamara Keith, NPR News. Transcript provided by NPR, Copyright NPR.