‘Fewer Managers’

Business lobbyists argue that changing the rules might actually hurt people like Marzuq, prompting employers to rethink their supervisory structures, reducing flexibility for managers to directly serve customers and cutting entry-level management jobs.

“It’s likely you would see fewer managers and assistant managers and more hourly workers,” said David French, senior vice president of government relations for the National Retail Federation. “Fewer slots for restaurant managers would limit career advancement.”

1938 Law

The 1938 New Deal-era law establishing the federal 40-hour workweek and requiring overtime for additional hours exempts professional, administrative and executive employees.

Labor Department regulations define those categories, in part, through a minimum salary level. The threshold, eroded by inflation, has only been raised once since 1975, a readjustment in 2004 under President George W. Bush that was criticized as too modest by progressives.

The overtime cutoff salary of $23,660 now only covers 11 percent of salaried workers compared with 65 percent in 1975, according to an analysis by Ross Eisenbrey, vice president of the Economic Policy Institute, a research group partly funded by labor unions.

Within the administration, officials have discussed a range of possible overtime thresholds. A $51,000 trigger favored by some Labor Department officials would cover an additional 6 million workers, said a person familiar with the internal discussions.

But some on the White House economic team have expressed concern that too sharp a shift could be disruptive to employers and endanger the economy’s recent strong job growth, the person said, adding that there is also a push to index the level to inflation.

An increase in the salary threshold to $51,168 would bring the threshold back up to the inflation-adjusted equivalent of the level set in 1975 under Republican President Gerald Ford. Eisenbrey estimates that would cover about half of today’s salaried workers.

‘Only a Name’

The definition of a manager is ambiguous enough under current regulations that restaurant or retail workers like Marzuq who spend most of their time doing manual labor or serving customers can be deemed “executives” exempt from overtime, Eisenbrey said.

“I was serving customers, making coffee, washing floors, cleaning the parking lot, shoveling snow, you name it, whatever other employees did,” said Marzuq. “Management is only a title, only a name, to get you in a trap: responsibility without authority.”

The administration is examining whether to tighten the definition of a management position in ways other than salary. Under the Bush administration’s 2004 rules, exempt executives must supervise at least two employees and management must be their primary duty, though there is no requirement covering the amount of time they spend on management tasks. California state regulations, by contrast, require more than half of an employee’s time be spent on management duties.