He can expand eligibility for overtime pay to millions of underpaid Americans. In fact, he may do just that, and sooner rather than later. He doesn't need the approval of an anti-worker Republican Congress, either. He can pretty much give them the finger.
A few months ago the Administration directed the Department of Labor to update current rules regarding employee overtime. The directive was aimed at raising the threshold pay level for overtime eligibility, and closing a Bush-era loophole in the regulations that allows employers to arbitrarily label employees as "managers" and thus exempt them from overtime pay.
The rules are issued in accordance with the Fair Labor Standards Act (F.L.S.A) which permits non-management employees "time and half pay" for work performed over 40 hours per week. Under the current test, so-called "white collar" salaried employees making above a certain salary threshold don't qualify for overtime.
But millions of people who fall within this "white collar" classification probably don't think of themselves as "white-collar." In point of fact the label is little more than a bad joke--"white collar" includes the assistant manager at the Arby's sweating with a mop until 2:30 am. for a dismal $30,000 a year. "White collar" is the guy stocking shelves at the Home Depot or Walmart who may spend a few seconds of his 10.25 per hour workday "supervising" a new hire stocking the same shelves. The only factor of significance for those actually in these positions is not what they are called, but how much they make:
Overtime pay can be claimed by salaried employees who make below a set salary threshold, which has been at $455 per week since 2004. Obama...says he wants to raise that threshold, making more people eligible for overtime pay.
"That threshold has failed to keep up with inflation, only being updated twice in the last 40 years and leaving millions of low-paid, salaried workers without these basic protections," according to a White House overtime fact sheet.
Only 12 percent of salaried workers today fall below the current threshold, compared with 18 percent in 2004 and 65 percent in 1975....
$455 per week is equivalent to $23,660 per year. After taxes that's barely enough to rent a trailer in back of the Arby's. The "white collar" threshold
deprives 88% of salaried workers the right to earn overtime, despite the fact that they may be working 50, 60, or 70 hours per week. And, predictably, businesses love it. It increases their profits while reducing their payroll outlays. It guarantees a continuous stream of low wage slaves perpetually clawing one another for a chance to "climb the ladder." And indeed, the howls of outrage from the business community when the Administration announced its intent to revise the rules were
sadly predictable. Here is one example, a CEO waxing indignant about the
joys of servitude at his Hardee's chains:
Rewarding time spent rather than time well spent won't help address this problem. Workers who aspire to climb the management ladder strive for the opportunity to move from hourly-wage, crew-level positions to salaried management positions with performance-based incentives. What they lose in overtime pay they gain in the stature and sense of accomplishment that comes from being a salaried manager. This is hardly oppressive. To the contrary, it can be very lucrative for those willing to invest the time and energy, which explains why so many crew employees aspire to be managers.
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The idea is to encourage managers to increase their compensation and improve their lives by running profitable businesses as if they owned them—regardless of the hours or tasks required.
Note how this steaming pile of reasoning implicitly pits one class of "unfortunate" (i.e., hourly "crew") workers against another ("managers"), while praising the noble sacrifices and aspirations of those who choose to ignore the fact that the pay for both classes of worker is dismal and stagnant, often with paltry or no benefits at all. The only difference is that one is paid for overtime, the other is not. Just as vapid are the rationalizations that denial of overtime is some sort of "character building" measure to instill a "managerial ethic." The fact is these so-called "managers" are trading higher, livable wages for the "privilege" of dubious job stability and the comforting reassurance of a regular paycheck, conditioned on their willingness to work longer and longer hours for nothing. Meanwhile, corporations have threatened to hire fewer workers, cut wages or cut hours if the overtime pay rules are changed, demonstrating that their concerns are motivated by profit and profit alone.
Administration officials have said these actions are needed because wages have stagnated despite soaring corporate profits, especially since the economic recovery began five years ago. Among the companies listed in the Standard & Poor’s 500-stock index, profits have doubled since then, even as the portion of the economy that goes to worker pay has dropped to an all-time low.
The Obama Administration wants to raise the threshold, to make more people eligible for overtime. But the Administration by all accounts intends to go further than that, indexing the threshold to the inflation rate (at least 3 million more people would be eligible today for overtime if the threshold had been indexed to inflation) and implementing a change in the Rules which will allow hundreds of thousands, if not millions of underemployed Americans to claim eligibility for overtime pay. Specifically, the Administration wants to undo a little piece of malevolent trickery instituted by the Bush Administration in 2004. Prodded by his big business donor base, Bush rewrote the Rule so that people who only performed a tiny percentage of so-called "managerial" duties could nonetheless classified be as "managers" and thus ineligible for overtime:
[T]he agency also revised the "primary duty" test that determines whether workers are managerial, refocusing it toward multiple subjective factors and away from time spent on a particular duty. This change opened the door to the idea of concurrent duties, experts told Reuters.
Translated into reality, the "concurrent duties" test allows a corporation to deny you overtime if you are assigned some nominally "supervisory" role over another employee. Presto! You're now a manager and no overtime for you. In a speech to the IAFF earlier this year, Secretary of Labor Tom Perez highlighted the Administration's intent to close that loophole:
"As a result of a loophole that was written into the regulation in 2004 by the Bush administration, quite literally somebody can work 1 percent of their time on management issues, 99 percent stacking the shelves and doing other work that has nothing to do with management, and you're considered a manager, and you are no longer entitled to overtime," Perez said.
These Rule changes were proposed in March of this year, and have yet to be announced, but by all accounts they will be issued early in 2015. If you listen carefully, you can almost hear the coming screams about "job losses" from the Republicans in Congress. They're perfectly happy with the current system of working an underpaid population to death. Obama should ignore them. At this point he owes them absolutely nothing.
After this election, every single Federal Agency should be re-writing its Rules around the clock, 24/7, to make this country as Democratic as possible, for as long as possible. If Americans are truly looking for an issue that defines the differences between the parties, this is the perfect opportunity for the Administration to demonstrate it.