President Obama calls for overtime changes

Published On: Mar 13 2014 10:03:34 PM EDT   Updated On: Mar 14 2014 12:25:12 AM EDT

VIDEO: President Obama signed an executive order to strengthen rules on overtime pay.


President Barack Obama announced Thursday that he wants to expand overtime to millions of Americans who are currently not eligible to do so.

Obama said he wants the Department of Labor to create a plan that would help millions of workers.

Channel 4 spoke with a labor attorney Thursday night who said if changes are made, they will mostly impact administrative, clerical-type workers.

Attorney Jack Webb also told Channel 4 that the move could be very costly for employers.

"I think it's going to have a significant impact on small- to moderate-size employers at distribution centers, transportation companies that employ a number of administrative employees in their offices," said Webb.

In Thursday's announcement, Obama said if people work more, they should get paid more, but he said millions of Americans aren't getting paid what they deserve.

The current salary threshold set in 2004 dictates that salaried workers who make at least $445 a week, or roughly $24,000 a year, are not eligible for overtime. For perspective, $445 a week amounts to about $11.37 in hourly wages.

Webb, a general commercial lawyer who specializes in labor employment, believes the salary per week limit could be raised to $500.

The other part of the current overtime equation is what's known as the "duties test." There are three categories of exemptions, meaning if your job is classified as any of these three -- professional, administrative or executive -- there's no overtime. The definitions of the categories are fuzzy and is ultimately up to the employer.

Critics of Obama's idea said expanding overtime could hurt job growth, increase employer's spending and pricing, even ultimately force them to close.

Webb said the expansion could add more paper work to employers in order to track overtime and there could be potential lawsuits from employees for back pay.

"My fear for employers is that this is going to drive additional litigation even for those employers trying to do the right thing, so the cost of doing business is going to go up," said Webb.


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