Obama Proposal Could Extend Overtime Benefits To More Workers

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As the Supreme Court wrestles with how to define the workday, the Obama administration is considering a change in rules governing the work week. For decades, employees who worked more than 40 hours a week had to be paid time-and-a-half for the extra hours they worked. Today, though, many employees are exempt from those rules.

As NPR's Scott Horsley reports, President Obama wants to narrow the exemptions and restore overtime for millions.

SCOTT HORSLEY, BYLINE: The 40-hour work week is a legacy of the New Deal, and as late as the 1970s, even most salaried workers could count on receiving overtime pay for any hours they worked beyond that - not anymore.

ROSS EISENBREY: People work 60 hours a week - 70 hours a week as assistant managers and don't get paid for their overtime.

HORSLEY: Ross Eisenbrey of the left-leaning Economic Policy Institute says overtime law makes an exception for certain white-collar professionals. And over time, that white-collar loophole has been widened to include a lot of grey. Workers making as little as $455 a week can now be denied overtime, so long as their employer gives them a supervisory title.

EISENBREY: They actually can spend the entire day serving customers, working the cash register, sweeping up, stocking, cooking - whatever it is, and still be considered exempt executives and not get paid a penny for their overtime work.

HORSLEY: President Obama has promised to change that. In March he ordered the Labor Department to draft a new overtime rule requiring time-and-a-half pay for many more low and middle income workers.

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PRESIDENT BARACK OBAMA: If you go above and beyond to help your employer and your economy succeed, then you should share a little bit in that success. And this is going to make a real difference in the lives of millions of Americans.

HORSLEY: Obama directed the Labor Department to work with employers in drafting the rule, but he acknowledged not everyone would be happy with the change. Restaurants and retailers are likely to be among the industries most affected. David French of the National Retail Federation argues the updated rule is unnecessary.

DAVID FRENCH: This is a decision that's being driven, it seems to us, as much by politics as it is by the reality of the workplace.

HORSLEY: The new rule is likely to raise the income threshold under which workers must be paid overtime. It could also narrow the supervisory exception, reversing a change made during the Bush administration. French worries about both those changes.

FRENCH: It's going to create a paperwork burden, but one big concern for us is it's going to affect customer service. In many retail establishments, managers step in during peak periods to help customers - to help manage the demand.

HORSLEY: French warns the upcoming rule could even slow job growth, but Eisenbrey of the Economic Policy Institute disagrees. Boosting workers' paychecks certainly won't hurt the economy, he says, and it might even help.

EISENBREY: Wages have stagnated for 15 years, and employees are not being paid enough to buy enough things to keep our consumer economy booming.

HORSLEY: Unlike other White House proposals, such as raising the minimum wage, the administration can change the overtime rule without any action by Congress. The Labor Department is expected to release a draft of its new rule next month, though it could be many more months before newly eligible workers start seeing extra money in their paychecks. Scott Horsley, NPR News, Washington. Transcript provided by NPR, Copyright NPR.