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Obama Pushes for Changes in Overtime Pay Qualifications

Posted by Kathy Harrington-Sullivan | Mar 17, 2014 | 0 Comments

In fast food restaurants, convenience stores and manufacturing facilities, salaried employees are working more than 40 hours a week without receiving the benefits of overtime pay to which they're entitled. In fact, they're making less per hour than the employees they “supervise” and less than minimum wage.

Salaried workers who make $455 or less a week are entitled to overtime pay of time and a half. However, according to the current law, salaried executive, administrative and professional employees are exempt from overtime pay. Therefore, many companies incorrectly designate employees as managers even though their supervisory duties are limited and they spend their workday during manual or clerical work. A good example is a shift supervisor at a fast food restaurant or retail store.

Yet, President Obama is striving to ensure workers get the overtime they deserve. Coming off his executive order to increase the minimum wage from $7.25 to $10.10 an hour, he recently signed a memo directing his labor secretary to rewrite exemption rules and increase the maximum weekly pay level from $455 to $553 to adjust for inflation.

“If you're making $23,000, typically you're not high in management,” Obama explained.

President Obama and supporters of the proposal believe employees will finally get the overtime paythey work so hard for, giving them the spending power to help propel the economy forward.

“Americans have spent too long working more and getting less in return,” he said in his weekly address. “So wherever and whenever I can make sure that our economy rewards hard work and responsibility, that's what I'm going to do. Because what every American wants is a paycheck that lets them support their families, know a little economic security, and pass down some hope and optimism to their kids.”

The backlash against fair pay

While Obama's push for overtime pay will provide workers more financial stability, critics say it could stifle the economy. Republicans, U.S. Chambers of Commerce and a number of business associations object to the proposal as they believe it punishes the businesses, forcing them to lay off workers in order to cover supervisors' wage increases.

Said House Speaker 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.”

Despite what the critics believe, it comes down to an issue of fairness and paying employees what they've earned. Right now, thousands of workers, especially those in industries like oil and gas, are working up to 70 hours a week, away from their families and enduring the physical pressures of manual labor. They never see an extra dime on top of their already limited salaries while their employers reap the financial benefits of their hard work.

“Growing income inequality is a persistent problem in the United States and contributes to anemic economic growth,” said Jeff Grabelsky, associate director of The Worker Institute at Cornell University, to NPR.

At the same time, companies who pay their workers a living wage are being pushed out of the market by competitors who disregard the law, destroying the ability for fair competition on which the economy was built.

While the proposal has a long battle ahead of it – experts say it could take 12 to 18 months for the law to get legs – the end result could be life-changing for the workers who are going above and beyond to ensure the success of their employers and the financial security of their families. By paying employees what they're worth and putting more back in their pockets, workers can help turn the economy around.

About the Author

Kathy Harrington-Sullivan

Kathy Harrington Sullivan is a Partner at Barrett & Farahany who helps potential clients understand the law, clarify their rights, and determine which steps they can take to protect themselves and their jobs.


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