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Obama pushes to make millions more eligible for OT

President Barack Obama this week will seek to force U.S. businesses to pay more overtime to millions of workers, the latest move by his administration to confront corporations that have had soaring profits while wages have stagnated.

On Thursday, the president will direct the Labor Department to revamp its regulations to require overtime pay for several million additional fast-food managers, loan officers, computer technicians and others who many businesses classify as “executive or professional” employees to avoid paying them overtime, according to White House officials briefed on the announcement.

Obama’s decision to use his executive authority to change the nation’s overtime rules is aimed at bypassing Republicans in Congress, who have already blocked most of the president’s economic agenda and have said they intend to fight his proposal to raise the federal minimum wage to $10.10 per hour from $7.25.

Obama’s action is certain to anger the business lobby in Washington, which has long fought for maximum flexibility for companies in paying overtime. In 2004, business groups persuaded President George W. Bush’s administration to allow them greater latitude on exempting salaried white-collar workers from overtime pay, even as organized labor objected.

Conservatives criticized Obama’s impending action. “There’s no such thing as a free lunch,” said Daniel Mitchell, a senior fellow with the Cato Institute, who warned that employers might cut pay or use fewer workers. “If they push through something to make a certain class of workers more expensive, something will happen to adjust.”

Marc Freedman, the executive director of labor law policy for the U.S. Chamber of Commerce, said the nation’s overtime rules “affect a very wide cross section of employers and our members.”

“I expect this is an area we will be very much engaged in,” Freedman said.

Obama’s authority to act comes from his ability as president to revise the rules that carry out the Fair Labor Standards Act, which Congress originally passed in 1938. Bush and previous presidents used similar tactics at times to work around opponents in Congress.

The proposed new regulations would increase the number of people who qualify for overtime and continue Obama’s fight against what he says is a crisis of economic inequality in the country. Changes to the regulations will be subject to public comment before final approval by the Labor Department, and it is possible that strong opposition could cause Obama to scale back his proposal.

Cecilia Muñoz, the director of the White House Domestic Policy Council, said the effort is part of Obama’s pledge to help workers thrive. “We need to fix the system so folks working hard are getting compensated fairly,” she said Tuesday evening. “That’s why we are jump-starting this effort.”

The overtime action by Obama is part of a broader election-year effort by the White House to try to convince voters that Democrats are looking out for the middle class. White House officials hope the focus on lifting workers’ pay will translate into support for Democratic congressional candidates this fall.

Since the mid-1980s, corporate profits have soared, reaching a post-World War II record as a share of economic output. The profits of the companies in the Standard & Poor’s 500 have doubled since the recession ended in June 2009, but wages have stagnated for the vast majority of workers in the same period.

In 2012, the share of the gross domestic income that went to workers fell to 42.6 percent, the lowest on record.

Under current federal regulations, workers who are deemed executive, administrative or professional employees can be denied overtime pay under a so-called white-collar exemption.

Under the new rules that Obama is seeking, fewer salaried employees could be blocked from receiving overtime, a move that would potentially shift billions of dollars’ worth of corporate income into the pockets of workers. Currently, employers are prohibited from denying time-and-a-half overtime pay to any salaried worker who makes less than $455 per week. Obama’s directive would increase that salary level.

In addition, Obama will try to change rules that allow employers to define which workers are exempt from receiving overtime based on the kind of work they perform. Under current rules, if an employer declares that an employee’s primary responsibility is executive, such as overseeing a cleanup crew, then that worker can be exempted from overtime.

White House officials said those rules were sometimes abused by employers in an attempt to avoid paying overtime. The new rules could require that employees perform a minimum percentage of “executive” work before they can have their overtime pay taken away.

“Under current rules, it literally means that you can spend 95 percent of the time sweeping floors and stocking shelves, and if you’re responsible for supervising people 5 percent of the time, you can then be considered executive and be exempt,” said Ross Eisenbrey, a vice president of the Economic Policy Institute, a liberal research organization in Washington.

Jared Bernstein, the former chief economic adviser to Vice President Joe Biden, and the former executive director of the White House Task Force on the Middle Class, embraced Obama’s move.

“I think the intent of the rule change is to make sure that people working overtime are fairly treated,” he said. “I think a potential side effect is that you may see more hiring in order to avoid overtime costs, which would be an awfully good thing right about now.”

Posted to: Business Jobs Nation - World

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"shift billions of dollars’ worth of corporate income...

into the pockets of workers."
It will in actuality take billions of dollars out of workers pockets for we will pay more as prices of goods and services rise.
This all sounds good on paper but what needs to be realized is that you cannot legislate benevolence.
Cost to the consumer will go up on everything. Corporations are not going to take the hit. The consumer(we) will.
The politicians who can all afford the increase or more likely, expense it to the taxpayer are just pandering to "look" like they are concerned. People are not as stupid as they would like to believe. The citizens understand that politicians are desperate to appear like they are worth our money.
q.v. the current budget stand off. Both parties are principally unprincipled.

More Income Tax...

Let's not forget the additional income tax the government will take from these OT wages.

Salary & Bonuses

Companies often adjust salaries based on an average of annual hours typically expended for a position, then offer tiered bonuses for those who perform above/beyond the average. The cream rises to the top and is rewarded. What incentive does a person have to improve performance or cultivate new skills if there's a guaranteed wage level to do nothing more than what's minimally required?

He Better Clean Up His Own House First

He has thousands of mid-level (GS-12, etc) federal employees who are capped at how much they can make per hour on overtime. Most of these folks are hard working individuals who have given their time and energy to make the military and this country safe. They're don't mind working, just pay them for it.

As for all other employees, same applies. If they work the hours they ought to get the pay.

Fix this injustice now.

Most executive level GS

Most executive level GS employees are salaried, they don't work for an hourly wage but are guaranteed a certain number of dollars per month no matter how few or many hours are worked. Military personnel also are salaried all the way from E-1 to O-10, this is why they can be assigned an unGodly number of hours of work per week and still get no "overtime."

Civilian business is the same way, salaried employees get no "overtime" while timeclock punching hourly workers do.

Obama needs to buy a clue. Once again he shows just how out of touch he is.

I doubt there is going to be much sympathy

for the GS-12 Step 5 making 70K and able to get straight time overtime when it comes to this particular issue. Especially considering the benefits and that as a GS, the fact that pay is higher than non-GS equivalents and you are more likely to die while at work than you are to get terminated. Not that their service isn't valued, but I believe there is more than fair compensation.

As for this approach...many folks fail to realize that businesses by nature adjust and compete to survive. If this EO is passed, businesses will simply adjust to ensure the newly classified employees don't have to work overtime. It will do nothing to add money to the workers' pockets; just a political facade.

The Obama Climate of Resentment

Last week, my office-cleaning lady told me that her pastor had announced to his flock that:

* a fair minimum wage should be $20.00/hr.;
* that Pres. Obama was doing what he could, but he needed every working American's help in making wages are fair; and
* she thus felt it to be her duty to speak up about it.

I believe her to be a happy employee. She is paid a good bit more than minimum wage, and is tipped well at Christmas. But, as I informed her, her job is simply not worth $20.00/hour.

Two observations:

First, when does Lois Lerner come and revoke this pastor's tax exemption for political activity (that's rhetorical, of course).

Second, spreading resentment is the only thing that President Obama is doing. It's what he does best.

Hmm

I can’t tell if you are madder at the cleaning lady for speaking to you or Obama for having a different point of view then you.
Two observations:
As far as Obama spreading resentment he does get a lot of help there with various folk misquoting him.
Who tips your cleaning lady at Christmas?

Ahh, Yet Again, the Mind-Reading Skills of Progressives

So just by reading my post, JCB, you are able to look into my mind and sense an animus on my part. It makes you the perfect Obama minion. No need to address any point with which you disagree. Just hate on that person for holding the contrary opinion.

The year-end "tip", which I assure you is generous, comes from my own wallet. I do not call it a "bonus" because her direct salary is paid by the company contracted to handle the cleaning services. But those salary charges are, of course, are passed through to my company.

So here's my suggestion, JCB. Since you obviously care for this lady so much more than I, post your e-mail address. I will send you details on how you might personally make up the difference in her pay.

Just by reading your post I

Just by reading your post I believe it is a load of BS. You've done in the past to run down the Prez and I am sure you will continue to do so with your "stories".

Denial -- Another Typically Progressive Trait

It matters not one bit whether you believe my "story" or not.

It is the unavoidable nature of reality that will ultimately prove up the significant measure of damage that President Obama has done to the fabric of our nation.

Why rhetorical?

Your question should not be rhetorical. It is a violation of a church's tax exemption for the church to get into political advocacy. Fat chance that anything will be done about it; churches that advocate the "correct" positions have nothing to fear from the current administration.

Agreement

For once I am in agreement with POTUS on this. Corps have been abusing the living crap out of this for a long time. I hope he also cleans up the definition of "executive" or "managerial" I have worked several jobs and was "salaried" but supervised no one, made no decisions, was just whacking moles all the time.

This won't give workers anymore money though, what it will give them back is time for their lives. No more designating a 17 year old as "line manager" and then having them work 70 hour weeks making subs. They will work 35 to 40 for the same pay and the cheap corporates will have to hire in someone else for the other 35. This alone I consider a win.

JUST ANOTHER BRILLIANT IDEA FROM SOMEONE WHO HAS NEVER

had a job and will never have one but will live the rest of his life as a member of the despised 1%. This fool continues to preach income inequality while under his rule the rich have gotten richer and the poor have gotten poorer. He continues his job killing policies while expanding his permanent low-income low-information voter base. He has clearly established himself as the worst president of all time.

I got a question for you RW

Why is it when someone disagrees with you they are ‘low-income low-information voter base’?

Because of the ACA millions

Because of the ACA millions of part time workers who used to get 35 to 39 hours per week are now being cut back to 25 to 28 hours per week. Full time should be 40 hours per week not 30. Now a worker who was part time needs two jobs and an employer willing to juggle schedules. Home Depot for instance announced they were hiring part time workers for the spring. My son checked out those jobs...20 hours per week! Yippee, you can really make ends meet on that. That'll barely pay for the gas to get there. Whatever law Obama passes Businesses will adjust so they don't have to pay any more than they are now.

YET AGAIN USURPING THE CONSITUTION

It is almost embarrassing to be an American these days. It is quite obvious Obama has a vision for this country that regardless how he plans on getting there right or wrong he is going to do it regardless of the consequences. This man has no regard whatsoever fo our beloved Constitution...none!

The current $455/week rate

The current $455/week rate equates at a salary just under $24K. The article doesn't say what this level will be raised to, but if it's doubled, and if the definition of what an executive is is tightened up this proposal could apply to a lot of jobs - like teachers, the military and other mid-level government workers. Can you imagine teachers and soldiers getting paid overtime for the extra work they do outside of their 8 hour workday? Likewise, though business profits may seem excessive to many, businesses obviously will not sacrifice those profits for higher pay.

So without passing judgement on the merits of this proposal, it seems fairly certain that taxes and prices will have to go up. This may be a good idea, but perhaps not.

hmmmm

It also works out to less then 11.50 per hour.
‘If the definition of what an executive is is tightened up the proposal could apply to a lot of jobs’. Yes it could, can you also imagine cleaners, mailroom clerks, factory workers getting paid for the hours they put in?

In my experience, cleaners,

In my experience, cleaners, mail room clerks and factory workers all generally have set hours and don't work beyond those hours. If they do, then certainly they should be paid overtime for that extra work. I picked examples that don't get overtime pay despite working many more hours than the "contract" requires.

Wow what a lot of what ifs here

About 20 years ago I knew a woman who as the only employee in a mail room worked an average 10 hours a day. This worked out to 10 hours of overtime per week.
One day she was called into HR and proudly told she was being promoted to supervisor of the mail room.
Yep you guessed it no pay raise, no additional help, same 10 hour days but without overtime.
Closing this loop hole is a great idea. Workers should get paid for what they work.
The headline should read ‘Obama pushes to put millions back on OT’.

OT is Otay!

OT is Otay!

WOULDN'T IT MAKE MORE SENSE TO JUST RAISE

everyone's minimum salary to $100,000 annually or why not $250,000 ? We could also shorten their work week to 4 days and pay them overtime if they come in on Fridays. What fantasyland does this moron live in ?

"What fantasyland does this moron live in ?"

He is not a moron. A pawn perhaps(probably), but he knows what he is doing. It is part of the plan to "fundamentally change America."
The "fantasyland" is what he and the other elites envision where they maintain their high roller lifestyles while the minions slave and toil on a day to day basis.
He is being used but doesn't really care as it has made him one of the elite. Peripherally elite, but more elite than most of us, none the less.

And yet...

Both parties and their partners big business and labor are pushing to leagalize millions of illegal immigrants most of whom will fill unskilled labor positions ensuring low wages.

Perhaps if we enforced our laws then companies might find it difficult to fill these mostly unskilled positions and would have to raise salaries and benefits to attract employees. Basically a supply and demand issue.

But not to worry that will never happen.

The illegal immigrants are working those jobs now

and the reason the pay is so low is because they have no leverage with the employer.

They cannot complain to anyone if they get stiffed or put into dangerous jobs.

If there were a reasonable legal path to staying and working, wages would rise and Americans themselves would be more willing to complete for those same jobs.

Wages have stagnated for decades even though profits and productivity have risen exponentially. That does not bode well for our GDP which depends upon people spending money. And that money comes from those in the lower 60% of income. Those folks buy and when they have a little more money, they can increase consumption which, in turn, creates more jobs.

Obama is

just buying more votes using other people's money. His presidency is based on it.

Comment deleted

Comment removed for rules violation. Reason: Post continued, repeated

STOP BEGGING

Rw1951 and VBborn you have it right. The socialist Barack Hussein Obama is doing nothing but buying votes. He is in a dream world and has his own printing press to make the money that is going to pay for all these programs he is sponsoring. I see my retirement just dwindling away every year from taxes while this socialist is in office. Mr. Hussein Obama is killing this country. Go to school, get your education, work hard at whatever endeavors you get into, in time you will be rewarded with hard work. That is what I’ve been taught by my parents. Not to go begging for it and then keep begging for it so that sooner or later it’s going to appear. I’ve worked all my life; I joined the military as my family has always served. When I was younger could barely afford the food on my table. Those were the lean years in the Military, with the peanut farmer

Fine. No more overtime? Then

Fine. No more overtime? Then cut out all this housing allowance, sea duty pay, hazardous duty pay, medical benefits and the like. I don't know why you think the military worker class is any more entitled than any other. Buying votes? In case you haven't noticed, the President can't run again.

Buying votes

The commentor was obviously referring to buying votes for the Democratic party. I agree with cutting out the special pays for the military. Those payments should already be included in their base pay. Yes, I mean they should be earning more.

A lot of truth in that statement

"…work hard at whatever endeavors you get into, in time you will be rewarded with hard work…"

It would be nice to be rewarded with some hard cash, too.

Unfortunately, a lot of companies get extra labor "off the clock" from their employees. And during a recession, when employees have so little leverage, it becomes worse.

There is a practice called "just in time labor".

A store, for example, will use software that factors in weather, holidays, day of week, etc. to determine how many employees they need at certain times.

Sounds good.

Problem is, if you are not available on short notice, you get bad shifts, or fired.

So you cannot get a second job. You are on standby for no pay.

Just expediting the inevitable...

transition to automation, replacing human labor.

http://www.bloomberg.com/news/2014-03-12/your-job-taught-to-machines-puts-half-u-s-work-at-risk.html

Much higher unemployment to come

and, hold on to your hats, it is not Obama's fault.

http://www.businessinsider.com/50-percent-unemployment-robot-economy-2013-1

This is another twist on the comment just below.

Hopefully, smart minds can come up with an economy that values the labor we must do, which is "hands on" such as health care, personal services, etc.

Otherwise we are going to have a serious problem: what to do with all those people.

The vast majority of jobs are not rocket science. And those jobs will disappear as computers handle them.

The actual "rocket scientists" and other top level jobs will be around, but the facts are most people are not at that level of intellect.

Population up, jobs down equals big problem.

IMHO

Smart minds are already at work on this problem

of technology eliminating the need for human work.

In France. The standard work week in France is now 35 hours and the minimum paid vacation is 5 weeks per year. OMG say our "real Americans" to this real solution to the real problem at hand. God please stop the dictator Obama from making us like Europeans! Better we should all stay wage slaves and do what the boss tells us - that is the real meaning of freedom.

Net Negative

All hail the KING!! Who needs the other branches of government - he's got a phone and a pen. The cool Jimmy Carter continues to blame everyone else for his failed policies. Something for the minions to consider that we learned in the 70s, a 10% raise with 15% inflation is not a winning formula.

Imagine what happens to our $17T deficit with an interest rate of 15%. It wasn't that long ago, kids. Can you spell bankruptcy?

Net Negative

All hail the KING!! Who needs the other branches of government - he's got a phone and a pen. The cool Jimmy Carter continues to blame everyone else for his failed policies. Something for the minions to consider that we learned in the 70s, a 10% raise with 15% inflation is not a winning formula.

Imagine what happens to our $17T deficit with an interest rate of 15%. It wasn't that long ago, kids. Can you spell bankruptcy?

HDFF = Maybe you should try reading the story again.

The law gives the Executive the power to set regulations. Bet you didn't whine when President Bush used that power to make it easier to short change workers back in 2004 (see the story). The idea that someone making $465 a week is a managerial employee as intended by the law is ludicrous on the face of it. If the threshold for "executive" compensation was set at $1,000 per week then it would be about where it was in 1976 on a constant dollar basis.

Yours is a common Tea Party response. Instead of commenting on the policy issues raised in an intelligent way pro or con, out comes the "King Obama" nonsense and other such drivel.

No Tea Party Here

Sorry, Dude, but I'm no Tea Partier. Just because I don't support the King doesn't mean I'm a Tea Party supporter. Trust me, Bush was not one of my heroes either.

Both the Bushwacker & the King have flushed a ton of money down the toilet on failed policies that look good on paper but somehow never work. Give me someone willing to operate within the constraint of spending limited to what you have in your pocket not throwing money you don't have at the wall (often ending up in the pockets of your contributors) and hoping something sticks.

This current "feel good" edict won't create anything but additional bureaucracy to support/enforce it.

Side effects

Expanding overtime eligibility is a fair policy, but don't kid yourself that there won't be a downside. Profit margins are the last place employers will look to make up for increasing payroll expenses. If overtime costs more, many employers will choose to pay it less by hiring more people. That increases the number of available positions ("creates jobs") but does it by taking pay away from the currently employed. And when some people can't get extra hours from their employer anymore, they'll seek second jobs and create more competition for the job-seeking unemployed.

You are correct

And what many folks do not see, and perhaps choose not to see, is that the Government has failed to sufficiently increase the number of good paying jobs...so their solution is to just "mandate" an increase in pay (e.g., minimum wage and OT changes). This doesn't create jobs and doesn't cause a tight labor market that would drive labor rates up. Many would say this puts money in consumer pockets, driving up demand for consumer goods and stimulating the economy...but that's a fallacy. Economically, it just won't work...all it does is provide political ad fodder for the elections.

The only source of good paying jobs

is people with money who are willing to spend it. Never mind the "job creators." They won't invest a penny in new jobs if there is not a market. Why would they?

"Many would say this [higher wages] puts money in consumer pockets, driving up demand for consumer goods and stimulating the economy." You are right. many do say that and that "many" includes most economists. Jobs are created by people with money they are willing to spend. Your statement that this Economics 101 fact is a "fallacy" is simply wrong.

Economists are a dime a dozen & will agree with either side

of a coin. Now if you are speaking of the economists guiding the government who are responsible for printing and dumping the billions in our market monthly, that is comical. It seems most on either side of the political spectrum can agree that what is being done currently isn't working. Extending overtime and increasing minimum wage will not create jobs. Most people just want a job first, talk about overtime and raising minimum wages after creating more jobs. How can someone continue to come up with programs and initiatives that cost money with no regard to the debt already accrued without putting people to work first? People will spend money if they have a job. That is common sense. Sometimes you don't need an economist to see reality.

Quantitative easing has had none of the dire consequences

predicted by "conservatives". The dollar is strong, real interest rates are low, prices are stable and the economy is growing.

True you can find "economists" who will support almost any nonsense just as you could find "scientists" who say smoking will not harm you or say that climate change is not real. But the fact is that most economists continue to believe that the main driver of the economy is people with money to spend and the willingness to spend it. That is what this economy lacks, Obama is trying to attack this core problem on two fronts:

1. Gov't spending on needed infrastructure to create jobs.
2. Fair pay by adjusting both the minimum wage and the OT rules to historical levels.

What is the GOP offering beside obstruction?

Hmm

OK..your two points..Government spending on infrastructure and minimum wage/OT.
- The attempt at boosting the economy with "shovel ready" projects was a flop, and the Administration admits to that. Money gone that our kids will repay.
- If raising the minimum wage and revising OT regs are so effective at boosting the economy..why wait until five years after the recession and well into the second term of the administration to start pitching the idea?

As for low interest rates...well...thank the Fed for their bond purchase program..

SFT

"... boosting the economy with "shovel ready" projects was a flop."
Really?

No, it wasn't. It helped stem the hemorrhaging left behind in 2008. Look around, the economy pulled out of the recession in spite of the best efforts of the GOP-T to sabotage every effort designed to help.

Why the delay? Because the recession is over and the economy is recovering. Those moves would make no sense in the midst of a free fall.

The bond purchase program WAS the method used for Quantitative Easing. They don't actually print money. They buy bonds held by banks giving those banks more liquidity. According to right wing theory that extra money supply should cause hyperinflation and soaring interest rates. It didn't.

Dokein

You are quite right that there will be economic consequences if current unfair labor practices are stopped. I also assume that you are not arguing that we should continue allowing unfair treatment of hard working people.

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