More On President Obama’s Initiative to Help Ensure a Fair Day’s Pay for a Fair Day’s Work

March 19, 2014  |  Employment Law, Overtime Violations

I am in full support of President Obama’s new initiative to ensure a fair day’s pay for a fair day’s work here at Baron and Budd.

Here’s why.

Currently, salaried workers who make more than $455 a week, or $23,660 a year, are ineligible for time-and-a-half overtime pay if they are deemed as “management.” The problem is “management” is a very loosely based term when it comes to employers trying to avoid overtime wage laws by abusing the exemptions. For example: an employer can label an employee as an exempt “executive” if they are paid a salary of at least $455 per week, are involved in “management” and can make recommendations on the hiring and firing of at least two other employees. What this means is an assistant store manager, for instance, making wages at or below the poverty line is considered exempt as an “executive” if he or she recommends hiring or firing for two or more other employees that he or she is deemed to supervise when, in reality, someone else is truly making the decisions on those employees. These workers in so-called “management” positions have little to no supervisory responsibilities and their work — both on and off the clock — mainly involves manual, clerical and or technical work.

While unveiling the initiative, Obama said it clearly: "If you’re making $23,000, typically you’re not high in management.”

During the unveiling, President Obama asked the Labor Department to devise tougher rules on overtime, something that could in turn lead to extra pay for millions of workers who currently are not being paid overtime.

In fact, some convenience store managers, office workers and fast food shift supervisors may currently be expected to work 50 or even 60 hours a week without overtime, meaning their hourly rate may be much less than the $7.25 an hour minimum wage. These workers may be saving the company a substantial amount of money with their overtime work, even performing duties such as cleaning that might not be on their job description to begin with, and yet they do not earn a single dollar more for their hard day’s work.

For a family of four, the federal poverty level is $23,660, or, $455 a week. That number may seem low for a family of four, even at poverty level, and that’s because it is. In fact, the threshold for overtime has not been raised in 10 years since it was upped by President Bush to $455. Today, if the cap had risen with inflation, it would be $553. And compared to the threshold of $250 set in 1975? Well, that’s equivalent to roughly $1,000 today given inflation, more than double the current cap.

As Obama said during the unveiling: “Overtime is a pretty simple idea… If you have to work more, you should get paid more.”

I could not agree more. That being said, I, along with Baron & Budd, am proud of our President for stepping up and encourage the Labor Department to do what is right for the millions of Americans who are not being paid fairly for their hard work.

If you have questions about existing wage laws, please contact me directly at 866-723-1890 or at avaught@baronbudd.com.

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