The U.S. Chamber of Commerce, the largest business lobby in the United States, will oppose President Barack Obama’s plans to strengthen overtime pay protections for millions of workers.
Obama is set to sign an executive order Thursday directing the Labour Department to raise the threshold for workers covered by overtime protections. The White House said it would affect millions of workers, mostly of low and middle income.
In a statement provided to Business Insider, the Chamber’s executive director of Labour Law Policy, Marc Freedman, said the proposed rule changes would add a burden to job creation — much like Obama’s goal to raise the federal minimum wage to $US10.10.
“Changing the rules for overtime eligibility will, just like increasing the minimum wage, make employees more expensive and will force employers to look for ways to cover these increased costs,” Freedman said. “Similar to minimum wage, these changes in overtime rules will fall most harshly on small and medium sized businesses, who are already trying to figure out the impact of Obamacare on them. We understand that the administration is looking for ways to put more money in people’s pockets, but the only way to do this is to grow the economy and create more jobs. Adding more burdens to employers will not accomplish that goal.”
The Obama administration’s argument was laid out Thursday by Betsey Stevenson, a member of the White House’s Council of Economic Advisers. Stevenson described the 40-hour work week as outdated and noted current regulations keep employees who work 50-60 hours from being paid overtime. One current Labour Department exemption gives companies leeway to prevent overtime pay for workers they deem “executive, administrative, and professional.”
Obama’s order will change the weekly salary level at which that exemption kicks in,. Current regulations prevent employers to deny time-and-a-half overtime pay to any salaried worker earning less than $US455 per week — a level set in 2004. The White House argued that has failed to keep up with the pace of inflation.
“There are 3.1 million people who, if the threshold had kept up just with inflation, would automatically be covered by overtime provisions,” Stevenson said Wednesday at the White House’s daily press briefing. “What we’re going to be doing is, in the weeks and months to come, looking deeply at this problem and making sure that the overtime provisions are working as well as they should in today’s economy.”
“The president believes that if you’re making $US25,000 a year and you’re working 60 hours a week, you should be getting paid for the extra hours you work,” she added.
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