Jun 30, 2015
Though he was quick to note that even more Americans deserve fair compensation for working more than 40 hours per week, presidential candidate Sen. Bernie Sanders (I-Vt.) on Tuesday endorsed President Barack Obama's announcement that he will soon update overtime pay regulations--a move that will give approximately 5 million middle-income workers a bump in their annual pay.
"We've got to keep making sure hard work is rewarded," Obama wrote in a op-ed announcing his decision. "Right now, too many Americans are working long days for less pay than they deserve. That's partly because we've failed to update overtime regulations for years--and an exemption meant for highly paid, white collar employees now leaves out workers making as little as $23,660 a year--no matter how many hours they work."
Under current overtime rules, full-time employees who work at least 40 hours and make more than $455 a week (or $23,660 per year) are considered management and are not eligible for overtime pay. But the new proposal--which can be implemented by executive order and without congressional approval--would raise the threshold to $970 per week (or $50,400 annually).
Jared Bernstein, a former White House adviser and now senior fellow at the Center on Budget and Policy Priorities, explained in the Washington Post on Tuesday why protections for these kind of workers were initially imposed:
Because [the Fair Labor Standards Act (FLSA) of 1938, legislation that included a national minimum wage and time-and-a-half pay for hourly and certain salaried workers after 40 hours of weekly work] needed to preempt the possibility that some employers might just label someone a salaried worker to avoid having to pay time-and-a-half. So a salary threshold was introduced, below which workers were automatically non-exempt. The problem is the threshold wasn't regularly adjusted for inflation, and while it has been sporadically raised, it has fallen well behind its historical levels, once you adjust for inflation (the new rule also proposes to index the new threshold to either price or wage growth; which one will be decided during the forthcoming comment period, where outside stakeholders can weigh in on the proposed rule).
According to Bernstein, who praised the move by Obama, it would be very difficult to "come up with a rule change or executive order--i.e., non-legislation--to lift the pay of this many middle-wage workers." It's especially important, he said, "because we live in a time when the bargaining power of many who depend on their paychecks is much diminished relative to the clout and power of those whose income derives from their wealth portfolios."
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Sanders, who has made raising wages for workers and combating the nation's extreme levels of economic inequality a centerpiece of his presidential campaign, said Obama's move is good news for the nation's struggling workers.
"Businesses no longer will be able to shirk their responsibility to pay fair wages by simply labeling workers earning as little as $24,000-a-year as supervisors," said Sanders.
If it was up to him, however, Sanders said he would have raised the eligibility for the salary limit even higher--up from Obama's $970 per week to $1,090.
Earlier this year, Sanders and 25 other senators sent a letter to the White House urging the U.S. Department of Labor to modernize overtime regulations. In the letter, they detailed how many U.S. corporations had exploited antiquated regulations to avoid paying time-and-a-half for workers who put in more than 40 hours a week on the job.
"These long hours are straining middle-class workers and their families," the letter stated. "Since the 1970s, average salaries for middle-class individuals have dropped even while salaried workers have increased the hours they spend on the job. Strengthening overtime protections will help millions of middle-class families."
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