The debate over increasing the minimum wage has been raging for months now, and it is clear that as long as Republicans hold control of Congress, nothing is going to be done. But President Obama indicated some time back that he intended to get things done where allowed by law, without Congress if necessary. One of those things has to do with overtime pay.
Last summer the president presented a plan to change the policy on overtime pay. Under the old regulations, the overtime threshold was $23,660. What that means is that workers who made over that amount could be classified as “managers” by their employer, which would exempt them from rules governing overtime work. On May 17, the Obama administration changed the rules.
The new overtime threshold will be $47,476 — double the old amount. It will also be indexed to inflation, and reviewed every three years. But won’t the congress just put the brakes on this, you ask? That’s the beauty of it. They can’t. The new overtime threshold is a change in Department of Labor regulations, and doesn’t require congressional approval.
The Huffington Post explains why this is a big deal:
Under the current regulations, many working-class employees who earn above the low salary threshold are classified as ‘managers’ and therefore don’t have overtime rights. Employers have an incentive to pile work onto these employees, since their extra time essentially comes for free. As a result, in retail some store managers will clock 60, 70 or even 80 hours, but only take home a modest salary in the $30,000 range.
Labor Secretary Thomas Perez talked about why the change is important.
The overtime rule is about making sure middle-class jobs pay middle-class wages. Some will see more money in their pockets … Some will get more time with their family … and everybody will receive clarity on where they stand, so that they can stand up for their rights.
In an email sent to signers of a petition calling for changing the rules, President Obama told this story:
One of the many Americans who has been working hard but struggling to keep up is a single mom from Tucson, Arizona, Elizabeth Paredes. As an assistant manager at a sandwich shop, Elizabeth sometimes worked as many as 70 hours a week, without a dime of overtime pay. So Elizabeth wrote to me to say how hard it is to build a bright future for her son. And she’s not alone: Today just 7 percent of workers qualify for overtime pay based on their salaries. Compare that with 1975,when more than 60 percent of workers qualified for overtime pay based on their salaries. This policy just hasn’t kept up with the times.
The president, fortunately, recognizes that many Americans are working more and falling farther behind. He concludes the email with this:
Americans have spent too long working long hours and getting less in return. So wherever and whenever I can make sure that our economy rewards hard work and responsibility, that’s what I’m going to do. Every hardworking American deserves a paycheck that lets them support their families, gain a little economic security, and pass down some opportunity to their kids. That’s always worth fighting for.
Thank you, Mr. President, for once again standing up for people that Republicans refuse to help.
Here is the video the White House released to explain the new rules:
Featured image via Getty Images