CBS News Logo Obama eyes big change to rules on overtime pay

Last March, President Barack Obama ordered the Department of Labor to review its policy on overtime pay. Today, that review is one step closer to completion. Under current law, employers are required to pay time-and-a-half wages to employees working more than 40 hours a week only if they earn less than $23,660 annually. The Obama administration is intent on increasing - and likely more than doubling - that salary threshold, according to people briefed on the administration's plans. That change is likely to have significant impact on workers in retail and the food services industry, like a restaurant manager who earns $30,000 a year but works 60 hours a week. "We need a national wage floor that that rises each year, so that its purchasing power doesn't erode with time," Labor Secretary Tom Perez wrote in a blog post. The Labor Department submitted a proposal to the Office of Management and Budget's regulatory arm Tuesday. It will undergo an interagency review before the details are unveiled likely in late May or June. A public comment period will follow that review before the final rule is adopted. AFL-CIO president Richard Trumka expects the salary threshold to land "somewhere in the fifties ($50,000s)," he said in an interview last week. Trumka estimates that if the OT threshold were increased to $51,000, roughly 6 million more workers would earn overtime. But pro-business groups like the National Federation of Independent Business (NFIB) are skeptical of the administration's action. "Our members oppose it strongly mainly because it's another arbitrary way for the government to increase their labor costs," said Jack Mozloom of the NFIB. The current law, which is part of the Fair Labor Standards Act passed in 1938, allows companies to designate someone making $25,000 a manager and thus avoid paying overtime, even if he or she works more than 40 hours a week. Certain professions like teachers are exempt. Judy Conti of the National Employment Law Project has Continue Reading

Millions of U.S. workers could soon qualify for overtime pay

Millions of U.S. workers could become eligible for overtime pay under an expected federal proposal that would change labor law, but business leaders warn that the additional rules would be costly and burdensome. For White Castle restaurants, where the average hourly employee makes $9.78 per hour, the company would incur an extra $8 million to $12 million annually, Jamie Richardson, vice president of White Castle Systems, told the House Committee on Education and the Workforce in a hearing on Wednesday. "The new regulations will only result in more complicated laws," and eventually more lawsuits, Richardson added. Currently, federal law requires that salaried employees be paid time-and-a-half for overtime only if they work more than 40 hours a week and earn less than $455 a week, or $23,660 a year. Certain other types of workers, including those classified as professionals, administrators or executives, are ineligible for OT pay. In practice, that means workers who make slightly more than the maximum allowable income or who are otherwise categorized as exempt may end up putting in much more than 40 hours a week on the job without additional compensation. As a remedy, the U.S. Department of Labor is expected to soon propose raising that income threshold to as much as $52,000 a year. Changing the threshold to $51,000 annually would merely be adjusting the rate for inflation since the cutoff was last adjusted in 1975, said Seth Harris, the former U.S. Deputy Secretary of Labor, in the hearing. Raising the cap to $51,000 from $23,660 would cover an additional 6.1 million workers, he said at the hearing. That's the same number calculated by the nonprofit Economic Policy Institute, which has urged the Labor Department to change the rate. "The folks who have gotten left behind are the ones who are going to benefit," said Rep. Mark Takano, D-Calif. For all restaurant and retail businesses, the change would cover about 2.2 million workers, according to a May report by Oxford Continue Reading

CBS News Logo Obama to expand overtime pay for millions of workers

President Obama, in an opinion piece appearing in the Huffington Post, announced that the White House is raising the threshold income level at which workers are exempt from overtime pay of time-and-a-half wages. The level is currently $23,360, according to the op-ed. Salaried workers who earn nearly $1,000 per week would become eligible for overtime pay under the proposal. The long-awaited overtime rule from the Labor Department would more than double the threshold at which employers can avoid paying overtime, from the current $455 a week to $970 a week by next year. That would mean salaried employees earning less than $50,440 a year would be assured overtime if they work more than 40 hours per week, up from the current $23,660 a year. Millions of workers could soon qualify for overtime pay "We've got to keep making sure hard work is rewarded," Obama wrote in an op-ed in The Huffington Post. "That's how America should do business. In this country, a hard day's work deserves a fair day's pay." Employers can now often get around the rules: Any salaried employee who's paid more than $455 a week - or $23,660 a year - can be called a "manager," given limited supervisory duties and made ineligible for overtime. Yet that would put a family of four in poverty territory. Obama says that the level is too low and undercuts the intent of the overtime law. The threshold was last updated in 2004 and has been eroded by inflation. The long-awaited overtime rule from the Labor Department would more than double the threshold at which employers can avoid paying overtime, to $970 a week by next year. That would mean salaried employees earning less than $50,440 a year would be assured overtime if they work more than 40 hours per week. To keep up with future inflation and wage growth, the proposal will peg the salary threshold at the 40th percentile of income, individuals familiar with the plan said. They requested anonymity to discuss the proposal ahead of the official announcement. Continue Reading

​7 things to know about the new overtime rule for workers

Hard-working Americans have something to celebrate: Overtime pay will soon be a reality for millions of additional workers. The Department of Labor is changing the country's overtime regulations to double the salary threshold to $47,476 a year, which the White House said will provide overtime pay to an additional 4.2 million workers. Some economists believe the rule change will actually help far more people than that. The left-leaning Economic Policy Institute estimates that 12.5 million salaried workers will see a direct benefit. Back in 1975, about 62 percent of salaried American workers were covered by overtime protections, a share that has dropped to just 7 percent today, according to the White House. The current salary threshold of $23,660 has remained in place for more than a decade, and it fails to cover many middle-class and low-wage workers, given that it stands below the poverty line for a family of four. Boosting the overtime threshold will put more money in the wallets of middle-class workers, will help others recover a work-life balance and is likely to lead to thousands of new jobs, said Ross Eisenbrey, vice president of the Economic Policy Institute on a call Wednesday to discuss the policy change. "Americans are working longer hours, but they still aren't getting ahead," said Bill Samuel, legislative director of the AFL-CIO, who also spoke on the call. "Millions of people will get a long overdue raise." To be sure, not everyone is happy about the change, with some businesses arguing that the regulation will backfire. Andy Puzder, CEO of Carls Jr. owner CKE Restaurants, warned in a Forbes' op-ed piece that some employers will "reclassify salaried employees as hourly," while the rule will add compliance costs and hinder workers' chances of joining the middle class. As Puzder put it: "Turning highly sought-after entry level management careers into hourly jobs where employees punch a clock and are compensated for time spent rather than time well spent Continue Reading

Kentucky Kingdom workers could lose overtime pay under Senate-backed plan

This story is developing and will be updated In a move that could impact the paychecks for thousands of workers at theme parks, golf course and sports stadiums, a Kentucky lawmaker wants to allow seasonal businesses to avoid paying its employees overtime.The proposal, Senate Bill 35, squeaked through that chamber last week and would apply to amusement parks and other recreational businesses that are open seven months or less in one calendar year. That could include a number of local seasonal businesses, such as the Kentucky Kingdom amusement park and the Louisville Bats, a minor league professional baseball team."I can only speak for what's smart and good for local seasonal workers, and this is smart and good for them," said Ed Hart, president of Kentucky Kingdom.Hart said he didn't ask for this legislation but supports it because he can't afford to pay overtime to employees who work more than 40 hours a week. He said it often comes into play when his younger summertime staff, many of whom make up to $16 an hour, return to school in August. The measure, Senate Bill 35, allows for more payroll flexibility for those remaining workers who want additional hours but don't want to get a second job, he said."You don't want someone to leave a 40-hour-a-week job here and catch a bus or whatever, and work part time someplace else," Hart said. "I'd much rather they stay here, work the overtime, get paid a good wage but not get paid time and a half, I can't afford that."The proposal was introduced by state Sen. John Schickel, R-Union, who said it was inspired by an independent baseball team in his district, the Florence Freedom, who have trouble finding and paying for help during the summer. He said Kentucky has a higher standard than the federal guidelines, which allow for overtime exemptions for seasonal workers, that put it at a disadvantage compared to neighboring states."Most, if not all, of these Continue Reading

For workers, much remains unsettled as new year begins

Visit The Boston Globe Share on Twitter Share on Facebook Comment on this Scroll to top of page Katie Johnston Globe Staff  January 01, 2018 As 2018 begins, battles are being waged over a number of issues that affect workers — with outcomes that could help determine which party controls Congress as voters head to the polls later this year.President Trump campaigned on a promise to lift up working-class Americans. But so far, businesses have been reaping most of the rewards, ending 2017 with a big win in the form of a major corporate tax cut and a number of rolled-back regulations.And as workers contemplate changes in their wages and workplace protections, or a lack thereof, many of them will be asking themselves: Has my quality of life improved since President Trump and the Republicans took over? Advertisement If the answer is no, it could fuel a political backlash. Get Talking Points in your inbox: An afternoon recap of the day’s most important business news, delivered weekdays. Thank you for signing up! Sign up for more newsletters here F. Vincent Vernuccio, senior fellow at the right-leaning Mackinac Center for Public Policy in Michigan, said that the recent tax overhaul, which will reduce taxes for many people, should put voters in a good mood.“When workers across the country see that in their paychecks, obviously they’re going to be grateful that they can keep more of their hard-earned money,” Vernuccio said.Workers also benefit from business-friendly policies that allow the economy to flourish, he said: “Policies that give employers more freedom to run their business and create jobs will undoubtedly help employees.”But the November 2017 elections indicate that more liberal candidates could be gaining the upper hand, said Paul Sonn, general counsel at the National Employment Law Project, a New York advocacy group for low-wage workers, noting that gubernatorial races in Virginia and Continue Reading

Jury concludes IT firm knowingly denied workers overtime pay

When Vernon Carre joined Computer Sciences Corp. in 2009 as a systems administrator, his assumption was it would be a standard, 40-hour-a-week position. It wasn’t until he was months into the job that his manager brought up his required “on-call” week. For one week every two months, he would have to be on call 24 hours a day for the entire week, able to log into the network to address a customer’s problem within 15 minutes. He never received a dollar of overtime pay, he says. “I basically said goodbye to my friends and got all the groceries I needed for the week,” said Carre, now 68, who left the company in 2014 after he was diagnosed with cancer. “You couldn’t walk more than 15 minutes away from your computer.” In December Carre and a group of colleagues won a favorable ruling in a hard-fought class-action lawsuit against CSC, the large IT contractor now called DXC Technology. A jury concluded recently that the firm knowingly underpaid more than 1,000 workers, wrongly denying them overtime pay. The case was filed in 2014 in U.S. District Court in Connecticut and went to trial Dec. 7. Attorneys involved in the trial said the proceeding lasted two weeks and concluded Dec. 20 in a unanimous vote. The amount of money that is to be paid out to employees is still to be determined. DXC Technology spokesman Rich Adamonis said the company plans to appeal the decision. At issue in the case is whether certain employees in the role of “systems administrator” — who are responsible for the day-to-day work of overseeing and troubleshooting IT systems — are exempt from the Fair Labor Standards Act. The FLSA requires employers to pay their employees overtime when they work more than 40 hours in a given week. Certain salaried professionals are exempt from the law’s overtime provisions, allowing companies to waive the requirements in some cases. DXC had argued that systems administrators fell under Continue Reading

An Unfulfilled Dream From the March on Washington: Labor Rights for Domestic Work

Fifty years ago on August 28, thousands of protesters descended on Washington, DC. The protest is colloquially known as the March on Washington, but it’s worth remembering its full name: “The March on Washington for Jobs and Freedom.” In fact, the economic repression people of color experienced played a central role in galvanizing the march and in the demands the marchers made. The protesters laid out ten concrete demands, half of which had economic implications: legislation barring discrimination in public housing, a federal jobs training and employment program, an increase in the minimum wage, an act barring discrimination by governments and contractors, and an expansion of the Fair Labor Standards Act (FLSA) “to include all areas of employment which are presently excluded.” Progress on these economic demands has been slow and bumpy. But that last bullet-point is a very concrete dream that has been denied. While the FLSA has been expanded since then, a whole category of workers—who are also disproportionately people of color—are still left out. The Fair Labor Standards Act created a floor for wages and a ceiling on hours with overtime pay for extra work. But when it was crafted in the 1930s, certain workers were deliberately edged out of its protections. As Suzanne Mettler writes in Dividing Citizens, it was the first such bill to be written in gender-neutral terms, but it still defined which occupations fell under its purview in such a way that “the majority of low-paid women workers and non-white men, those who could have benefited most from national labor standards, were exempted from coverage.” Women’s retail and service jobs were mostly left out, as were agricultural jobs often held by people of color. Excluding the latter meant that “50 percent of southern African American employees, men and women,” were omitted. “The combined exclusion of agricultural and domestic workers also Continue Reading

Just One Example of How Difficult It Is to Make Labor Law Better for Workers

A major reform for federal overtime pay rules was blocked by a Texas judge just before it was set to go into effect last week, handing a gift to the incoming Trump administration by allowing millions nationwide to work extra time without extra compensation. The Obama administration sought to adjust the eligibility threshold for overtime pay for low-income salaried workers, who have historically been exempt from the standard 50-percent wage premium for hours worked over the standard 40-hour week. Currently those earning as little as $23,660 annually—in the range of frontline fast food workers, well below the estimated living wage in California and New York—are ineligible for overtime. Essentially. they might end up working longer than their lower-ranked waged coworkers and be paid less per hour. Under the Labor Department’s new rule, salaried workers earning up to $47,476 a year, or about $900 a week, could earn additional overtime pay. But Federal District Judge Amos Mazzant struck down the measure. Although the reforms aim simply to update rules based on standard protections for those who work excess hours, the court concluded such regulatory changes should be based on types of work, rather than on levels of compensation, and should be addressed through Congress, not the Department of Labor, lest this effort to remedy years of shorting workers on their wages cause their industry “irreparable harm.” The Labor Department now plans to appeal the injunction, which effectively blocks an estimated $570 million in extra earnings in 2017. Labor advocates argue that over the years, both the classification rules and compensation levels of the existing overtime regulations have been dramatically distorted by legal manipulation and eroded by structural inequality. Denouncing the narrow ruling as “hostile” to the spirit of fair pay laws, Ross Eisenbrey, vice president of the Economic Policy Institute (EPI), argues that the Continue Reading

Celine Dion sued by ex-handyman for allegedly cheating her employees out of overtime pay

A Florida handyman is suing Celine Dion for unpaid overtime claiming the singer is a tight-fisted taskmaster with her domestic employees. Keith Sturtevant said he was asked to work 48 to 60 hours a week by Dion and her husband Rene Angelil but offered no extra money beyond his $63,000 per year salary because he was a designated as a private contractor. “There is no question he worked just tons and tons of overtime hours, and when it came to a head, that is when he left,” Sturtevant’s lawyer Dennis Card told the Daily News. “My client is not exempt from the Fair Labor Act, and they know it damn well,” Card, who filed the claim in federal court, said. Sturtevant claims he was the sole employee in charge of a warehouse controlled by Dion, 44, and also worked at her compound in Hobe Sound, Fla., performing “extensive” tasks such as cleaning house shutters, building book shelves, repairing kitchen items, setting up and tearing down event equipment and running errands. Dion’s rep was not immediately available for comment. According to the complaint, Dion employed at least three other full-time maintenance workers as independent contractors “in an attempt to avoid paying workers compensation and appropriate federal withholding taxes.” Sturtevant was hired in March 2009 and worked for Dion until June, the lawsuit stated. Card declined to discuss the exit. “His departure may be the subject of another lawsuit,” Card told The News. Join the Conversation: Continue Reading