Do you feel like you’re overworked and underpaid? If so, President Obama is looking to help you. As you may know, the President has been fighting to raise the federal minimum wage to $10.10 per hour for some time. This has been no easy battle, as he faces heavy GOP opposition in Congress. While the President was successful in increasing the minimum wage for federal contractors, he had to issue an executive order to do so.
With or without Congress, President Obama is continuing his crusade for lower and middle class workers. He recently announced that he will impose more stringent federal regulations for overtime pay. Under the President’s legislation, companies will have to pay their employees overtime in more situations. Under the current laws, businesses can use loopholes to avoid paying overtime. They don’t have to pay employees time-and-a-half if they’re considered executive or administrative or if they make more than $455 a week in regular pay. Here are some of the ways President Obama’s legislation will affect businesses.
Overtime Pay Required for More Workers
Under President Obama’s proposal, overtime benefits will be extended to more Americans. Right now, businesses are only required to pay low-earning employees time-and-a-half after 40 hours. The President plans to raise the income threshold for overtime from $455 to $984 per week. According to the Center for Budget and Policy Priorities, this means about 5 million more employees per week will be eligible for time-and-a-half overtime pay.
Fewer Loopholes
In the current system, certain loopholes exist that make otherwise eligible employees exempt from overtime pay. For example, if employees can be considered a supervisor in any part of their job, companies do not have to pay them time-and-a-half. This means employees could work four extra hours stocking shelves and only a few minutes overseeing others, but they’ll still be denied the overtime rate.
Under a white-collar provision, companies do not have to pay overtime to workers classified as professional, administrative or executive. Say, for example, you’re an assistant to an environmental consultant. Your boss tells you to stay after work for a few hours and write a report based on data from www.oilscams.org. Your company could technically deny you time-and-a-half pay for the work because you’re an administrative/professional employee. President Obama’s proposal seeks to remove such provisions so all workers get the pay they deserve.
Another Executive Order
To pass the legislation, President Obama will again have to exercise his executive authority. His power to adjust overtime regulations comes from the Fair Labor Standards Act, which was passed by Congress in 1938. Previous presidents have exercised this power in the past — for example George W. Bush was the last president to increase the income cap for overtime in 2004. While President Obama has the power to regulate overtime standards, it’s not as if the American people will be completely without a say. The public will be able to comment on the legislation before it passes onto the Labor Department, so it’s possible the President will adjust his proposal accordingly.
Giving Workers Their Fair Share
One of the reasons President Obama wants to change overtime regulation is so workers get their fair share of company profits. For the past few decades, many corporations have seen record profits, but they have failed to share this wealth with their employees. Workers’ profit shares are at an all time low.
According to the New York Times, wages made up around only 40 percent of the country’s gross domestic income in 2012. Despite the fact that we’re still in a recession, many companies have turned in record numbers in the past few years. One can’t help but wonder if corporate greed has kept our country in an economic downturn for as long as it has.
Whether or not you’d benefit financially from overtime reform, do you agree with President Obama’s proposal? Will you take advantage of the public’s opportunity to comment on the legislation?