WASHINGTON -- Some U.S. workers--including those in convenience stores--who are deemed ineligible for overtime compensation under what's known as the "white-collar exemption" would be able to collect extra pay under an executive order President Barack Obama plans to issue March 13, a White House official told Bloomberg.
The order will direct the U.S. Department of Labor to modify overtime rules so millions more people will be eligible for overtime pay for working more than 40 hours a week, said the White House official, who requested anonymity because the plan hasn't been officially announced.
Workers now classified as executive, administrative or professional may include managers of fast-food restaurants and c-stores who could receive overtime pay under the new rules, the official told the news agency.
Currently, many businesses aren't required to pay overtime to certain salaried workers if they earn more than $455 a week, a level that was set in 2004 and comes to about $24,000 a year. Ross Eisenbrey, vice president of the liberal Economic Policy Institute, and Jared Bernstein, a former White House economist, recently proposed the limit be increased to $984 a week, or about $50,000 a year, reported The Wall Street Journal.
"That would mean between five- and 10-million people could be affected, but they might choose a lower number," Eisenbrey told the newspaper.
The rule change is expected to apply to salaried workers, as most of those paid by the hour already qualify for overtime. It would amend the implementation of the Fair Labor Standards Act and likely would require employers to pay time and a half for weekly work in excess of 40 hours by certain employees.
A White House official said that overtime rules had "eroded"" over the years. "For example, a convenience store manager or a fast-food shift supervisor or an office worker may be expected to work 50 or 60 hours a week or more … and not receive a dime of overtime pay," the official told the paper.
The change would come after the Labor Department solicits comments on the new threshold. Bernstein said officials were looking at raising the weekly salary threshold from anywhere between $550 a week to close to $1,000 a week.
"Between those two thresholds there are millions of salaried workers who will now be eligible for time and a half if they work overtime," he said.
In anticipation of the Executive Order, National Retail Federation (NRF) senior vice president for government relations David French saidm "We are skeptical of the politics of the proposal and certainly of the timing. This is not an issue that has been percolating--it has been a matter of settled law for 10 years and seems to be working. We think this is politically motivated.
"If implemented, this would have a significant job-killing effect. The last time these rules were looked at, an update was desperately needed because of the uncertainty around overtime rules and the bonanza it was creating for trial lawyers. There is no evidence that is it desperately needed now. Employers who carefully considered the proper classification of their workforce 10 years ago would have to go through that process all over again, and would again be faced with uncertainty, administrative burdens and costs that are contrary to the goal of job creation.
"At the very minimum, any new regulations on overtime need to go through the full, formal rulemaking process and be thoroughly debated with input from all sides."
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