Some U.S. workers who are deemed ineligible for overtime compensation under what’s known as the “white-collar exemption” would be able to collect extra pay under revised regulations President Barack Obama plans to order tomorrow, according to a White House official.
Obama is directing the Labor Department 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 announced.
Workers now classified as executive, administrative or professional may include managers of fast-food restaurants and convenience stores who could receive overtime pay under the new rules, the official said.
President George W. Bush in 2004 set $455 per week as the threshold for what constitutes a white-collar worker for overtime pay purposes. The White House official didn’t say what the new threshold would be.
About 10 million workers might benefit from the rule if it applied to people making less than $50,000 a year, the Economic Policy Institute said today. The Washington-based group supports the change. Obama will leave it up to the Labor Department to decide what pay threshold to set, said Ross Eisenbrey, the group’s vice president.
Work Changes
“It changes your quality of life when you know you can’t be required to work an extra 20 hours a week without being paid for it,” he said in a phone interview. “It could mean more money in your pocket, and on the other hand it could mean a more relaxed and reasonable life.”
The amount a change would cost employers depends on the threshold, which the institute recommends be about $52,000 a year, and on how employers decide to react, he said. Employers could limit workers to 40-hour work weeks or could pay workers time and a half for hours worked above 40.
The Obama proposal would restrict who can be labeled supervisors and made exempt from the rule, said Eisenbrey, who has talked with White House staff about it.
“The restaurant industry is famous for doing this, for calling people assistant managers,” he said. “Retail establishments do this, convenience stories. But it’s pretty widespread.”