President Obama Moves To Expand Overtime Pay

President Obama is asking the Labor Department to begin a rule-making process to expand the number of workers who are eligible for overtime pay. It's part of his effort to address income inequality.

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ROBERT SIEGEL, HOST:

From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.

MELISSA BLOCK, HOST:

And I'm Melissa Block. President Obama is taking another step to raise the wages of workers, and he plans to do it without getting Congress involved. The White House says tomorrow, Obama will direct the Labor Department to change the rules for businesses on overtime pay. The change could mean that millions of private-sector workers currently classified as management could eventually qualify for overtime.

But as NPR's White House correspondent Tamara Keith is here to tell us, there are many details yet to be worked out. And Tamara, why don't you walk us through this potential rule change. Explain what the current system is for overtime pay, and how that would change.

TAMARA KEITH, BYLINE: People who work more than 40 hours a week now are supposed to be paid overtime, but there are a lot of exceptions - for executives, managers, other salaried workers. And the administration's concern is that there are a lot of people who are classified as executives who spend most of their time waiting tables or cleaning floors, stocking shelves, doing things that don't seem particularly executive.

They work way more than 40 hours a week, and they don't get paid anything extra. They certainly don't get overtime. Right now, someone earning as little as $23,000 a year can be considered an executive. The president is going to ask the Labor Department to change the rule. It's not clear how the department will change it, but they could raise the minimum salary or they could change the definition of executive.

BLOCK: And just to be clear, this is something that the president has the authority to do through executive order or executive action - impose a change like this on businesses.

KEITH: This is sort of a standard, boring, old rule-making process. The president is asking the Labor Department to look at the rule. George W. Bush did the same thing about a decade ago, and broadened the definition of executive. The Obama administration is likely to reverse some of that. Cecilia Munoz is director of the White House domestic policy council.

CECILIA MUNOZ: This is something that is well within the administration's authority. There is an existing rule; it hasn't been updated for a long time. He is directing his secretary of Labor to update this rule to make sure we're rewarding hard work in this country.

KEITH: And that's a theme you'll hear a lot as the president, throughout this year, talks about income inequality.

BLOCK: Well, what's the reaction been?

KEITH: Well, I think you can say it's been predictable. Left-leaning groups think it's a great thing. Right-leaning groups and business organizations say it's a job killer. House Speaker John Boehner was asked about it earlier today.

REP. JOHN BOEHNER: If you don't have a job, you don't qualify for overtime, so what do you get out of it? You get nothing. 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.

BLOCK: So Tamara, where does this go from here? How long could this take?

KEITH: It could take a while. So the first thing that has to happen is tomorrow, the president will direct the Labor secretary to start working on this. Then there will be a rule-making process and a draft rule and talking to stakeholders. And there is going to be intense lobbying on this from the very business groups who say it's a job killer. If this is on a fast track, experts say that it could take a year or 18 months. So nothing is happening immediately.

BLOCK: OK, Tamara, thanks so much.

KEITH: You're welcome.

BLOCK: That's NPR White House correspondent Tamara Keith, talking about President Obama's plans to expand overtime pay.

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