President Obama is expected later this week to direct the Department of Labor to restructure its regulations governing overtime pay. The changes would require companies to offer overtime to positions like fast food managers and computer technicians—positions that are normally classified as “executive or professional” in order to avoid paying for overtime.
The President’s effort to expand the number of workers who qualify for overtime comes under the authority of the 1938 Fair Labor Standards Act. As it stands now, employers cannot deny overtime to salaried workers making less than $455 per week. Obama would like to raise that level, as well as prevent the practice of improperly classifying workers as “executive” in order to avoid compensation.
The administration is trying to combat the growing gap between corporations and their workers. As the Times points out, profits for S&P 500 companies have doubled since 2009, but wages have not risen in parallel.
The decision will likely anger both the Republican caucus as well as business lobbyists who believe that the government should not be so hands-on about how they compensate employees. Obama has also announced his intention to try and was the federal minimum wage nearly $3 per hour.