Seeking to influence workers’ incomes where possible, President Barack Obama signed a presidential memorandum Thursday directing the Labor Department to devise new overtime rules that would make more workers eligible for time-and-a-half pay for their extra hours of work.
The memorandum was one of the most far-reaching executive actions taken by the president this year. The rules would be aimed at salaried workers who make more than $455 a week and those who are ineligible for overtime because they are designated as management even though their supervisory duties are minimal.
“Unfortunately, today millions of Americans aren’t getting the extra pay they deserve,” Obama said during a White House ceremony attended by workers and employers.
The memorandum does not specify what the rules or new salary thresholds should be, leaving the rule-making to the Labor Department. A proposed rule is not expected until the fall.
The memo, however, underscores Obama’s pledge to bypass Congress when necessary and act on his own on economic initiatives. For instance, even as he calls for Congress to increase the federal minimum wage from $7.25 an hour to $10.10, he has taken executive action to increase the minimum wage for federal contractors.
Advocates of new regulations on overtime say millions of workers could benefit. Critics say it could overburden companies, especially small business, and actually cost jobs.
At issue in the overtime initiative are regulations that create exceptions to legal requirements that employers pay time-and-a-half for time worked beyond a 40-hour workweek. Currently, salaried workers making more than $455, or $23,660 a year, aren’t eligible for overtime if some of their work is considered supervisory even though many spend most of their day doing manual, clerical or technical work with few management duties.
Some labor economists say broadening the universe of workers who can get overtime would increase take-home pay for workers, thus benefiting the larger economy. The new regulations also could encourage employers to reduce overtime work and hire more employees to work the extra hours without having to pay time-and-a-half.