The media proclaimed “lame duck” president has roared back again, as President Obama signed an executive order this morning order that put the Labor Department into action to extend overtime pay and raise wages for 5 million workers.
The White House announced the President’s action via a fact sheet:
Today, President Obama announced that the Department of Labor will propose extending overtime pay to nearly 5 million workers. The proposal would guarantee overtime pay to most salaried workers earning less than an estimated $50,440 next year. The number of workers in each state who would be affected by this proposal can be found here.
The salary threshold guarantees overtime for most salaried workers who fall below it, but it is eroded by inflation every year. It has only been updated once since the 1970s, when the Bush Administration published a weak rule with the strong support of industry. Today, the salary threshold remains at $23,660 ($455 per week), which is below the poverty threshold for a family of four, and only 8 percent of full-time salaried workers fall below it.
President Obama directed the Secretary of Labor to update regulations relating to who qualifies for overtime pay so that they once again reflect the intent of the Fair Labor Standards Act, and to simplify the rules so they’re easier for workers and businesses to understand and apply. Following months of extensive consultations with employers, workers, unions, and other stakeholders, the Department of Labor developed a proposal that would:
– Raise the threshold under which most salaried workers are guaranteed overtime to equal the 40th percentile of weekly earnings for full-time salaried workers. As proposed, this would raise the salary threshold from $455 a week ($23,660 a year) – below the poverty threshold for a family of four – to a projected level of $970 a week ($50,440 a year) in 2016.
– Extend overtime pay and the minimum wage to nearly 5 million workers within the first year of its implementation, of which 56 percent are women and 53 percent have at least a college degree.
– Provide greater clarity for millions more workers so they – and their employers – can determine more easily if they should be receiving overtime pay.
– Prevent a future erosion of overtime and ensure greater predictability by automatically updating the salary threshold based on inflation or wage growth over time.
The President wrote in a Huffington Post op-ed, “We’ve got to keep making sure hard work is rewarded. Right now, too many Americans are working long days for less pay than they deserve. That’s partly because we’ve failed to update overtime regulations for years — and an exemption meant for highly paid, white collar employees now leaves out workers making as little as $23,660 a year — no matter how many hours they work.”
In plain English what this new rule will do is end the practice by some employers of deeming low paid workers ineligible for overtime pay by sticking a managerial title on their job duties. The retail and service sector industries commonly use this practice to keep wages low.
With one executive order, President Obama has taken a step to boost wages for millions of hard working Americans. The President’s action is a giant win for labor, and for workers all across the country.
Republicans have insisted that raising the threshold for overtime will kill jobs, but there is no evidence that this will happen. Republicans are confusing what they believe, anything that is good for workers is bad for the economy, with reality.
Congressional action is not required on these new rules so more whining about “Obama the dictator” should be expected from Republicans, but today workers got a big win, and President Obama has taken action to raise wages for millions.
The left is on an unmistakable roll.
Mr. Easley is the managing editor. He is also a White House Press Pool and a Congressional correspondent for PoliticusUSA. Jason has a Bachelor’s Degree in Political Science. His graduate work focused on public policy, with a specialization in social reform movements.
Awards and Professional Memberships
Member of the Society of Professional Journalists and The American Political Science Association