Think you’ll be paid extra?
Think you’re going to get a raise?
Think they’ll be able to afford extra staff?
Paid overtime for salaried positions is a stupid as the $15/hour burger flipper. Businesses can’t afford it and will cut jobs to make ends meet. If you don’t feel you’re being paid fairly – get a new job… oh wait – in this Obama/Big-Government/Socialist economy – there basically aren’t any…
WASHINGTON – President Obama unveiled a long-awaited plan to drastically expand the number of people eligible for overtime pay, in a move that he said would ensure “hard work is rewarded” — but that critics warn could hurt job growth at a fragile time.
Under the proposal unveiled late Monday, salaried workers who earn nearly $1,000 per week would become eligible for overtime pay.
The rule from the Labor Department would more than double the threshold at which employers can avoid paying overtime, from the current $455 a week to $970 a week by next year. That would mean salaried employees earning less than $50,440 a year would be assured overtime if they work more than 40 hours per week, up from the current $23,660 a year.
“We’ve got to keep making sure hard work is rewarded,” Obama wrote in an op-ed in The Huffington Post. “That’s how America should do business. In this country, a hard day’s work deserves a fair day’s pay.”
Although the Labor Department’s estimates suggest the proposal would raise wages for 5 million people, other estimates are far higher. The Economic Policy Institute, a liberal think tank, recently estimated that a threshold of $984 a week would cover 15 million people.
“This is by definition middle-class people. This reverses decades of neglect,” said EPI President Larry Mishel.
Under the current threshold, only about 8 percent of salaried workers are eligible for 11/2 times their regular pay when they work overtime. The EPI estimates that doubling the salary level would make up to 40 percent of salaried workers eligible.
Yet many Republicans have opposed Obama’s plans to increase the threshold, arguing that doing so would discourage companies from creating jobs and dampen economic growth. Sen. Lamar Alexander of Tennessee, who chairs the Senate’s labor panel, has derided the idea as designed “to make it as unappealing as possible” for companies to create jobs.
To keep up with future inflation and wage growth, the proposal will peg the salary threshold at the 40th percentile of income, individuals familiar with the plan said.
The president was to promote the proposal during a visit Thursday to La Crosse, Wisconsin.
Obama’s proposal aims to narrow a loophole that the president has long said some employers exploit to avoid paying overtime.
Employees who make above the salary threshold can be denied overtime if they are deemed managers. Some work grueling schedules at fast food chains and retail stores, but with no overtime eligibility, their pay may be lower per hour than many workers they supervise.
The existing salary cap, established in 2004 under President George W. Bush, has been eroded by inflation. Obama has long charged that the level is too low and undercuts the intent of the overtime law.
The proposed changes will be open for public comment and could take months to finalize. They can be enacted through regulation, without approval by the Republican-led Congress.
Obama, in his op-ed, argued the exemption was intended for highly paid, white-collar employees but now punished lower-income workers because the government has failed to update the regulations.
The beneficiaries would be people like Brittany Swa, 30, a former manager of a Chipotle restaurant in Denver. As a management trainee, she started as an entry-level crew member in March 2010. After several months she began working as an “apprentice,” which required a minimum 50-hour work week.
Yet her duties changed little. She had a key to the shop and could make bank deposits, but otherwise spent nearly all her time preparing orders and working the cash register. She frequently worked 60 hours a week but didn’t get overtime because she earned $36,000.
The grueling hours continued after she was promoted to store manager in October 2010. She left two years later and has joined a class-action lawsuit against Chipotle, charging that apprentices shouldn’t be classified as managers exempt from overtime. A spokesman for Chipotle declined to comment on the case.
The Associated Press contributed to this report.Follow enlightenedlbrl