Dive Brief:
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On Thursday President Barack Obama will ask the U.S. Department of Labor to require overtime time pay for so-called “white collar” workers, like retail managers who make more than $455 a week. The directive would increase that salary level.
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The president’s authority comes from the Fair Labor Standards Act of 1938 and reverses a similar but opposite directive in 2004 from former President George W. Bush, which gave employers wider latitude for the exemption.
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States like California and New York already require white-collar overtime pay for workers earning more than $455 per week.
Dive Insight:
This move is the latest in President Barack Obama’s efforts to follow up on his pledge to moderate disparities in income in the United States, despite opposition from Congress. In January the president raised the minimum wage for federal workers to $10.10 from $7.25 and urged a hike in the national minimum wage in the private sector as well. The move is subject to public comment and is expected to draw stiff opposition from business and strong support from labor unions and worker advocates, and could affect retail workers in management positions or with higher pay from commissions who work overtime. While businesses are expected to fight the move, recent studies from retail experts suggest that bigger profits accrue to retailers that pay workers more than the current minimums.