Employers must pay employees for working, thanks Obama

Via NYTimes:

Quote:

WASHINGTON — President Obama this week will seek to force American businesses to pay more overtime to millions of workers, the latest move by his administration to confront corporations that have had soaring profits even as wages have stagnated. On Thursday, the president will direct the Labor Department to revamp its regulations to require overtime pay for several million additional fast-food managers, loan officers, computer technicians and others whom many businesses currently classify as “executive or professional” employees to avoid paying them overtime, according to White House officials briefed on the announcement. [ . . . ] Under current federal regulations, workers who are deemed executive, administrative or professional employees can be denied overtime pay under a so-called white-collar exemption. Under the new rules that Mr. Obama is seeking, fewer salaried employees could be blocked from receiving overtime, a move that would potentially shift billions of dollars’ worth of corporate income into the pockets of workers. Currently, employers are prohibited from denying time-and-a-half overtime pay to any salaried worker who makes less than $455 per week. Mr. Obama’s directive would significantly increase that salary level.

The current minimum threshold for the "white collar" exception applies to salaried employees who earn more than $455 per week, or $23,660 per year. This article suggests the Whitehouse will not set the new minimum threshold, but will leave it up the labor department to set the new threshold.

Quote:

In addition, Mr. Obama will try to change rules that allow employers to define which workers are exempt from receiving overtime based on the kind of work they perform. Under current rules, if an employer declares that an employee’s primary responsibility is executive, such as overseeing a cleanup crew, then that worker can be exempted from overtime. White House officials said those rules were sometimes abused by employers in an attempt to avoid paying overtime. The new rules could require that employees perform a minimum percentage of “executive” work before they can be exempted from qualifying for overtime pay.

"Abuse" refers to the tendency of fast food, retail, convenience stores, telemarketing, and tech support employers who create positions "assistant manager", which fall under the umbrella of "executive duties", as a means to deny employees overtime.



Specifically, I believe this is a response to two cases, Jones vs Virginia Oil Company and Family Dollar FLSA Litigation, involving assistant managers at a gas station and a Family Dollar (respectively) being exempt from overtime despite spending >85% more time performing non-exempt tasks (cashiering, stocking shelves, and performing janitorial duties). Courts ruled in both cases that, regardless of the amount of time employees spend doing non-exempt tasks, their managerial duties are most important to the success of the store, so they meet the "executive duties" requirement for overtime exemption.



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I think Obama's "pay people for working" proposal will be a lot more palatable to Americans and more likely to pass in congress than raising the minimum wage.

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