The plan raises the cap under which most workers must get overtime for working more than 40 hours a week. It doesn’t require congressional approval, but is expected to be criticized by businesses.
RENEE MONTAGNE, HOST:
Some 5 million American workers could get a bump in their paychecks under a proposal by the Obama administration. A rule drafted by the Department of Labor would make many more workers eligible for overtime pay when they work more than 40 hours in a week. President Obama touted the measure with an op-ed in the Huffington Post last night. And he’s expected to take it up on Thursday during his speech in Wisconsin, where fierce labor battles have been waged. NPR’s White House correspondent Scott Horsley is on the line now with more details. Good morning.
SCOTT HORSLEY, BYLINE: Good morning, Renee.
MONTAGNE: What exactly is the administration proposing?
HORSLEY: The administration wants to restore the New Deal legacy of the 40-hour work week. For decades, if you worked more than that, you were awarded with time-and-a-half pay. And as late as the 1970s, most workers could count on extra pay when they worked overtime. But there has always been a carve-out for certain white-collar professionals. The idea is that well-paid survivors who aren’t punching a clock are not entitled to overtime.
Well, over time, that white-collar loophole has grown and grown. And today, you know, you have night managers at fast food restaurants and retail stores making as little as $23,000 a year working 50 or 60 hours a week, and they’re not entitled to overtime. So the administration wants to change that, update the rule so anyone making less than about $50,000 would be guaranteed time-and-a-half when they work more than 40 hours a week.
MONTAGNE: And as I’ve just said, that could affect millions of workers, but describe them for us.
HORSLEY: Well, the administration estimates as many as 5 million workers could get a raise as a result of this proposal. I spoke not long ago with a former retail manager, Joe Giragosian (ph), who said, you know, when he first got his job with a supervisory title at the age of 20, he thought he was hot stuff until he did the math and realized he was missing out on thousands of dollars in a potential overtime pay.
JOE GIRAGOSIAN: I’m almost living the American dream, in some sense. But when you get down to the nitty-gritty, and you really start realizing that it – it really wasn’t much to be a salaried person. It ended up doing me worse (laughter).
HORSLEY: And what’s more, he said his job duties weren’t very different from the people he was ostensibly managing. For some employers, the supervisory loophole’s been an easy way to substitute a fancy job title for what would otherwise be thousands of dollars in overtime pay.
MONTAGNE: And, Scott, the president has been talking about wages for some time now. He’s been pushing a minimum wage increase, for one. What is different about this effort?
HORSLEY: Yeah. His minimum wage push has not gotten very far in Congress, of course, although it has prompted some increases in the minimum at the state and local level. What’s different about this is that this is a step the administration can take on its own. It doesn’t need Congressional approval.
That said, the proposed rule is likely to face pushback from some employers, especially those in the retail and restaurant sectors. They say they need this supervisory exemption for flexibility. In fact, the administration’s been very cautious in rolling this change out. The president first called for the Labor Department to update the rule in March of last year. So it’s already been over a year to produce a draft, and there’s still an extended comment period to come. The president said in his op-ed last night it will be 2016 before any workers actually see a bump in pay because of this change.
MONTAGNE: And, of course, this initiative – or at least this announcement of it – comes on the heels of a pretty good week for the president. Is there a signal here about what’s ahead in the last year and a half of the Obama administration?
HORSLEY: Yeah, it was a good week last week. The president’s signature health care law was upheld by the High Court. His trade agenda rebounded after being written off for dead. And what we’re seeing now is a president who’s not content to rest on those victories. He’s going to keep pressing for higher wages, for an expansion in the Affordable Care Act, so this is a president who’s very much still on offense.
MONTAGNE: And as you can hear, we’re talking to Scott Horsley, NPR White House correspondent, not in the White House, but at home this morning…
MONTAGNE: …On the President’s push to expand overtime pay. Thanks very much.
HORSLEY: Good to be with you.