Last week, President Obama ordered the Department of Labor to revise regulations determining which workers qualify for federal overtime protections, a move that was presented as a way to increase income for some lower-wage workers. It’s not. In reality, it’s a matter of basic fairness.
The issue begins with the federal Fair Labor Standards Act of 1938, which established the national minimum wage for most workers and guaranteed overtime pay for more than 40 hours of work a week. But the law also allowed overtime exemptions to be set by the Labor Department. Criteria for those exemptions have changed over the years, but were based on the nature of the worker’s duties and the worker’s salary, the presumption being that higher salaries denoted higher-status administrative workers who did not need the same protections as lower-wage production workers (an arguable point).
But the threshold doesn’t apply to workers categorized by their employers as executive, administrative or professional, the so-called “white collar” exemption. A fast-food shift supervisor who does primarily the same work as kitchen workers isn’t entitled to overtime, because her boss categorizes her as management.
Pro-business groups immediately leapt on Obama’s directive on the principle that paying workers more will cut into profits and lead to a recalibration of work shifts, hours and other aspects of employers’ labor costs. Echoing their arguments against raising the minimum wage, they warned that the redefinitions could lead to layoffs. That may or may not be true, but it’s hardly a defense for intentionally redefining a worker’s status to deprive him of overtime.