Executive Order Could Mean OT Pay for Many Salaried Workers

b_250_0_16777215_00_images_obgrabber_2014-03_20b2795c2e.jpgShaunWilkinson/Thinkstock (WASHINGTON) -- President Obama is pressing his case that many Americans should be paid more for the extra work they do by issuing a directive through an executive order that would compensate certain salaried employees who aren't compensated now for overtime. This proposal involving the Labor Department would affect salaried employees such as fast food shift supervisors or convenience store managers, who often work beyond their 40-hour shifts but don't see any more money in their paychecks.

If Obama goes through with the executive order, which the White House says falls under the 1938 Fair Labors Standards Act, the Labor Department would hike the pay threshold for those covered by overtime rules. At present, salaried workers earning over $455 per week are exempt from overtime.

It's expected Republicans will argue the case for businesses that say the government should not intrude in their ability to set wages.

Responding to Obama's latest use of executive powers to fight income inequality, House Speaker John Boehner argued, "The president’s policies are making it difficult for employers to expand employment. And until the president’s policies get out of the way, employers are going to continue to sit on their hands."

Nonetheless, salaried workers share of the gross domestic product in 2012 was 43 percent, an all-time low.

Meanwhile, businesses could react to the planned changes in a number of ways, including reducing the pay of salaried employees or hiring temporary workers or independent contractors to cover the overtime hours that they might pull from their current staff.

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