WASHINGTON – It was reported today that President Barack Obama will use his executive authority to mandate that businesses pay more overtime to workers.
According to the New York Times, Obama will ask the Department of Labor this week to change its rules on how workers that are classified as “executive or professional” are paid. Currently, workers that companies name as “executive or professional” are not required by law to be paid overtime wages. The Fair Labor Standards Act says that any worker covered by the act must receive overtime pay for hours worked in excess of 40 in a workweek at a rate not less than time and one-half their regular rates of pay.
Many salaried workers are left out of the overtime pay requirement. In many cases, the government ends up subsidizing workers who make too little, by giving them food stamps, reduced price school lunches, and more.
Also at this time, the president is seeking a large increase in the minimum wage, from $7.25 to $10.10. Many large corporations have seen record profits while wages remain stagnant over the past 10-15 years. The president’s imminent move to force companies to pay more overtime plus a possible minimum wage increase is seen by many as an attempt to even out the flow of dollars to workers who have been left behind as corporate profits boom.
The US Chamber of Commerce, known to be anti-worker, has blasted the minimum wage and any move by government to impose mandatory overtime pay.
“The empirical evidence generally suggests that the effect of overtime regulation is to raise wage rates and reduce employment…and a variety of other distorting effects” on the economy, the Chamber claimed. “Overtime coverage causes firms to substitute more expensive for less expensive labor, “redistributing income from lower to higher earning workers.”
Republicans continue to fight the minimum wage hike, and will likely furiously battle the president and Democrats on this executive order.
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