Obama Seeks To Expand Overtime Eligibility To Millions

President Obama this week will instruct the Labor Department to overhaul its regulations, opening million of workers currently exempt to be paid for additional overtime work, The New York Times reports. According to the Times, Obama will seek to outline how much oversight work an employee must perform as a regular part of his or her job before they can be considered “executive or professional” employees, who are exempt from overtime pay, in an effort to curtail   employer abuse of the self-regulating system that currently exists. Obama’s proposal also would significantly increase the minimum weekly salary that’s used as a benchmark for determining overtime eligibility. Currently it’s $455, meaning  salaried workers who make more than that are not eligible for overtime pay.  With that minimum bumped up, fewer salaried employees could be blocked from receiving overtime, potentially shifting billions of corporate income to workers.

The move, another example of Obama’s strategy of exercising his executive rights, feeds into the larger Democratic effort to address income inequality leading into the 2014 midterm elections next fall. While profits of companies in the Standard & Poor’s 500 have doubled since the recession ended, wages during that period have stagnated for a vast majority of workers. In 2012, just 42.6 percent of gross domestic income went to workers, the lowest percentage on record.

[Update: March 13, 2014] Obama officially unveiled the effort today in a 10–minute address in the East Room of the White House. “Our economy has been growing for a number of years now,” he said, “but for the average family, wages have barely budged.” Obama specifically noted the “executive or professional” designation as something that needs rethinking, saying it is “an exception that was originally meant for high-paid, white-collar employees [that] now covers workers earning as little as $23,660 a year.” In some cases, he said, “this rule actually makes it possible for salaried workers to be paid less than the minimum wage.”