On March 13th, President Obama declared an executive order to update and modernize the “white collar” exemption of the federal overtime rules that currently exist. These changes ordered to the Labor Department will allow extra pay for millions of workers when they work over 40 hours a week. The Fair Labor Standards Act states that non-exempt workers must be paid 1.5 times their pay rate when they work more than 40 hours per week. However, “white collar” employees, who at the time were considered to be high-salary employees, were exempt from this wage protection. According to The New York Times, this no longer the case because today the salary cap that prevents employees from receiving “time and a half” is about $24,000 a year. Subsequently about 88% of workers in the United States, including executive, administrative and professional employees, are exempt from overtime pay. Unfortunately this order from President Obama does not mean that these exempt employees will start receiving overtime pay right away. Instead, the Secretary of Labor will develop a plan to expand the number of workers that will be considered non-exempt and make it easier for both employees and employers to receive and provide this wage protection.
For the official release of the Presidential Memorandum from the Office of the Press Secretary click here!
Do you think this a proper step towards the President’s goal of shrinking economic inequality?
Let us know what you think in the comments!