President Barack Obama will order the Department of Labor to take steps to force private-sector employers to pay overtime to more salaried employees, a White House official confirmed Wednesday.
The administration's proposed rule-making under the Fair Labor Standards Act, first reported by the New York Times, would push employers to pay overtime to more workers by raising the weekly wage cap full-time employees have to hit before being ineligible for overtime. The move, which will come Thursday, is one component of the president's efforts to work around a divided Congress this year, while positioning Democrats favorably before this fall's midterm elections.
Under current regulations, salaried employees making less than $455 a week must be paid overtime, a threshold set in 2005 by the Bush administration. In 1975 it was $250 per week, the equivalent of $970 in today's dollars. The White House is not yet revealing its proposed new cap—which will be subject to public comment and will likely face strong opposition from the business community—or when it will kick in. But a White House official said the proposal will help "millions," and offered up California and New York as models for the proposal. Those states have set thresholds of $640 per week and $600 per week (which will increase to $800 per week and $675 per week in 2016), respectively.
"Due to years of neglect, one of the linchpins of the middle class, the overtime rules that establish the 40-hour workweek, have been eroded," the official said. "As a result, millions of salaried workers have been left without the protections of overtime or sometimes even the minimum wage. For example, a convenience store manager or a fast food shift supervisor or an office worker may be expected to work 50 or 60 hours a week or more, making barely enough to keep a family out of poverty, and not receive a dime of overtime pay. It's even possible that some of these workers make less than the minimum wage per hour."
The move follows an executive order by Obama to raise the minimum wage paid to new federal contract workers, as well as a public relations push to raise the federal minimum wage under the banner of "Opportunity for All." The White House is betting on Republican opposition to the popular legislative and executive actions to boost Democrats in the polls this year.