Mixed reaction to proposed overtime rule change

Restaurant Worker
Restaurant Worker

Are you paid to work overtime? If not, you may be one of the millions of Americans that President Barack Obama wants to help. The president is asking the Labor Department to raise the wage cut-off for overtime pay.

Current law exempts salaried workers from earning overtime if they make more than $455 a week. That's even if employees are regularly expected to work more than 40 hours.

The president is expected to announce the proposed regulation changes Thursday. The proposal is part of what Obama calls a “year of action.” He also wants the federal minimum wage increased to more than $10 an hour.

The plan is getting mixed reaction in Northeast Wisconsin.

At the Hampton Inn in Ashwaubenon, a couple of employees are salaried. Their pay is based on a 45 hour workweek.

“Understanding that if you're salary you could be called in at midnight, you could have to work extra hours on a particular day, so there's some overtime hours built in to the salary already,” said Lawry Larson, Hampton Inn general manager.

President Obama's proposal to expand overtime pay requirements may sound good for workers, but Larson says it could instead negatively impact his salaried employees.

“I would most likely reduce the salaried employees to an hourly rate commensurate with what they're currently making but they would lose that extra five hours a week of overtime,” said Larson.

Economics experts say if the president's plan passes many businesses will likely look at a variety of options to make up the cost.

“Probably try to schedule more carefully so they didn't incur the higher overtime costs and they might try to monitor their workers closely to make sure that they're working more productively so they don't have to work overtime,” said Tom Nesslein, UWGB economics professor.

Nesslein says he doubts the president's claim that millions of workers would be affected by the change. He doesn't see the proposal having a major effect on the economy.

“It's hard to know whether there's any data on how serious a problem is this. Is this only affecting a few people, and they're working two hours overtime or are they forced to work 15 hours overtime on a regular basis?” said Nesslein.

Republicans warn the plan would lead businesses to staff reductions and hiring freezes.

“The president's policies are making it difficult for employers to expand employment, and until the president's policies get out the way employers are going to continue to sit on their hands,” said House Speaker John Boehner, R-Ohio.

Larson suggests more research before moving ahead.

“I think you need to give the businesses the flexibility to maybe revaluate themselves, maybe police themselves,” said Larson.

White House officials say Obama is allowed to make the change on his own under the Fair Labors Standards Act.

There will be a public comment period before the Labor Department can start implementing the rule.