Obama Pushes For Overtime Pay Protection

President Obama says he wants to ensure proper payment for overtime work. The Wall Street Journal's Sudeep Reddy and NPR's Marilyn Geewax discuss what that could mean for workers and businesses.

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MICHEL MARTIN, HOST:

This is TELL ME MORE from NPR News. I'm Michel Martin. We're going to start the program today by talking about another front in the debate over income inequality. It's become a major focus of President Obama and many other Democrats and progressives. Specifically, the president has been pushing for ways to help lower-income workers get raises and for the long-term unemployed to get more help. Now the White House is raising the issue of overtime pay - who gets it and who doesn't. On Thursday, the president said he is asking the Labor Department to rewrite the federal rules about who qualifies for overtime pay. The White House says the current rules are often abused and need an update. Here's the president.

(SOUNDBITE OF SPEECH)

PRESIDENT BARACK OBAMA: If you're working hard, you're barely making ends meet, you should be paid overtime, period, because working Americans have struggled through stagnant wages for too long. Every day, I get letters from folks who just feel like they're treading water. No matter how hard they're working, they're putting in long hours. They're working harder and harder just to get by, but it's always at the end of the month real tight.

MARTIN: We wanted to know more about just what the rules are and what the president wants to do and what the other arguments are in this area. So we're joined once again by Marilyn Geewax. She is a senior business editor here at NPR. Welcome back, Marilyn.

MARILYN GEEWAX, BYLINE: Hi, Michel.

MARTIN: Also joining, Sudeep Reddy. He is an economics editor at The Wall Street Journal. Welcome back to you as well.

SUDEEP REDDY: Great to be here.

MARTIN: So, Marilyn, like I said, we want to know what the current rules are and what does the president want to do. So is there kind of a general understanding of who's eligible for overtime and who isn't, and how does the president want the rules to change?

GEEWAX: Yes, all of this goes back all the way to the Great Depression in the 1930's actually. Congress decided to set certain basic rules for how the workplace should function. And one of the things they decided then was that we'd have a 40-hour workweek. And if you were an hourly worker and your boss asked you to stay more than 40 hours, you should get time and a half. But there were exemptions put into this for people who were considered executives, supervisors and managers. And those rules get updated from time to time. It doesn't take an act of Congress.

The Labor Department can update those rules. That was last done in 2004. And under those rules that were established during the Bush administration, if you make $455 a week or more, you could be considered a manager. And if you were - I mean, that's the pay cut off, but then there's also other rules, which is that at least part of your job is supervisory. So what that could end up looking like is you're a 19-year-old shift supervisor at a fast food restaurant overseeing a group of three or four 16-year-olds and you make $24,000 a year, you're considered an executive. And a lot of...

MARTIN: On the other - on the other hand, though, you could be making a very great deal more than that...

GEEWAX: Yes.

MARTIN: ...But be in a demand field where people can call you up at any time. Conversely, you could be a person who gets overtime, but you have kind of control over your own workflow. So there's a lot of things that have changed in the economy over the recent years. So what does the president want to do specifically?

GEEWAX: Yes, it can be complicated - who's really a manager, who's not. But a lot of workers argue that, really, people who are being called supervisors by their employers are really just taking the trash out after the store closes. They're sweeping the floor. Some people really, really are executives or they really are supervisors, and some people just are kind of glorified cleanup.

MARTIN: OK, so how does the president want to change this?

GEEWAX: So his goal is to redefine these rules. Now it's not exactly clear what he would do, but he obviously wants to raise that $455 level, perhaps, to as high, some people say, as $50,000 year. In other words, if you make less than $50,000 a year, even if you have some supervisory positions, you still should be able to get overtime. And they may redefine what - how much of your job has to be supervisory for you to be qualified as that. So it's a matter of rewriting the rules. It could take a very long time - maybe a year, maybe a year and a half or more because these are very technical things.

And as we discussed, there's a lot of shades of gray in there. So this is something yet to be worked out. But a lot of workers feel this is the right direction to go because there are really, literally, millions of people who could be covered by this.

MARCOS

MARTIN: Now I understand that there's already been some resistance to this and I just want to play a clip of tape from - this is House Speaker John Boehner.

(SOUNDBITE OF SPEECH)

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 the way, employers are going to continue to sit on their hands.

MARTIN: So, Sudeep, let me ask you this question - is there specific resistance to this idea of examining the rules around overtime or are people like John Boehner just, in general, critics of the president's philosophy on some of these issues?

REDDY: This - it's more the latter. This is the never-ending tension on these issues. The White House is trying to ask a much larger question, and that's why are so many people in America working so much harder than they were before, being more productive than they were before and not really rising up the income ladder like they might have before? And that is the central organizing philosophy of a lot of what the White House is looking at in the push for the minimum wage, in this overtime rule, in the debate about education. Now to be fair, the GOP is also climbing into this debate.

And people like Marco Rubio, who's a potential presidential candidate, they all see the politics of this. They want to come in and say, well, yes, people do need opportunity, they do need to rise up, but the way to do that is to not put more burdens on businesses and to create more freedom for businesses to be able to do what they want to do.

MARTIN: Well, that was going to be my question - is their general objection that the focus should not be on income inequality per se, but on expanding employment? I mean, that their argument - it's just the wrong set of priorities and if those two conflicts, the focus should be on reducing unemployment? Or is their general - and I guess what I want to know is - what's their better idea?

REDDY: Their idea is to come at this from another direction. The White House, the Obama administration, has tried for years to do what's called increasing aggregate demand to boost the economy through the stimulus, through other support to try to give businesses some freedom through cutting back on certain regulations - they just, in the eyes of a lot of Republican lawmakers, haven't cut enough. And so the resistance here is coming more from people - from lawmakers and from businesses who say enough is enough. Most American employers feel like they're under assault already and not just because of anything that's happened over the last few years.

The amount of paperwork it takes to start a business and to run a business and to keep it sustained in this era at the federal level. at the state level, at the local level is enormous. And they have to hire all sorts of people just to keep going on that front. They don't want more rules and more policies that are going to - that could hold them back when they're just trying to get by as businesses too.

MARTIN: You know, here's a related story, Marilyn - and if you're just joining us, I'm speaking with Marilyn Geewax - business editor here at NPR - and Sudeep Reddy, that's who was speaking just now. He's economics editor at The Wall Street Journal. Marilyn, I wanted to ask you about this related story - a group of workers are suing McDonald's for underpaying them. They're alleging that McDonald's made them come to work, but didn't let them clock in until customers came into the store, among other things. And I just wanted to ask - what do you call that? And is there some precedent for this kind of complaint by workers?

GEEWAX: People are using the phrase wage theft. There's - a lot of unions and workers are saying that if you come into a convenience store and you steal a jug of milk, you could be arrested for theft, but if the boss tells you to work off the clock, they're stealing your labor but that doesn't count as a crime. And so there are groups of workers who are trying to push some lawsuits. This is happening in California, New York and Michigan - the workers at McDonald's franchises are saying they're being asked to come in by their bosses maybe an hour before they actually go on the clock because they say, well, there's not enough customers so just sit here and, you know, just hang out until I need you. But you're required to be there, you just don't get paid until the boss decides that OK, now you're in the game.

MARTIN: Is this the first high-profile lawsuit of this type? Obviously McDonald's is such a large employer that things that occur get attention, but is this whole issue - I've heard a lot of kind of think tank discussion...

GEEWAX: Right.

MARTIN: ...Among labor union workers about kind of wage theft. But is this the first time this has kind of become a broader discussion that's entered the legal - the law, you know, the realm of the courts?

GEEWAX: Well, this whole issue, this phrase of wage theft, is getting more traction. There are more suits being filed around the country. And I think this one is the first to get a lot of visibility, but workers have always filed complaints saying that they've been asked to do things off the clock. And, you know, this is not a new problem. You know, decades ago, I worked in a grocery store where I'd clock out at 6 p.m. but then I was expected to start sweeping the floor and I wouldn't often get out until 6:30, but my pay ended.

So this isn't something new, but I think that in this context where - you know, what my solution to that was I quit and went to work at a department store. When there are more jobs, you have more options. But in this economy, when there are more than 10 million people unemployed, a lot of folks don't have options so they end up taking whatever is dished out. And this is where the pushback is coming where they're saying it's time for workers to say no I'm not going to stay after hours and sweep the floor. I want to be paid for my work.

MARTIN: Speaking of the unemployed that - members of the Senate say, Sudeep, that they've reached a bipartisan deal that would renew federal unemployment benefits for the long-term unemployed, remembering that these expired, you know, earlier, you know, this year. And I just wanted to ask, you know, what's the latest news there? Is there a sense that this deal is going to hold and does this foretell anything else about - we began our conversation talking about the kind of the fraction - the friction between the parties around this economic issues. Is this something that foretells agreement on other things?

REDDY: This should be a heartening sign that lawmakers from both parties do see this as an important issue. We thought, a few months ago when these benefits expired, that the millions of people were sitting out there on the sidelines would just be forgotten. And at least, whether they have made their voices heard or people close to them have made their voices heard, lawmakers are at least realizing that this is a group that needs to be addressed. People do need help getting out of an awful situation of long-term unemployment. It's still a long road ahead. You do require the House to step up and pass something.

MARTIN: Is the House amenable to this?

REDDY: The House has sent signals that it might be open to doing something if it's paid for. And this looks like one way way it could be paid for. But the politics of the House are obviously a lot more difficult, and they tend not to be as productive as the politics of the Senate. But I don't think anyone this year expected anything meaningful to come out of Congress at all. So to see glimmers of hope is at least a positive sign.

MARTIN: Sudeep Reddy is an economics editor for the Wall Street Journal. Marilyn Geewax is a seniors business editor for NPR. They were both kind of to join us once again in our Washington, D.C. studios to bring us up-to-date on these issues. Thank you both so much for speaking with us.

GEEWAX: Oh, you're welcome.

REDDY: Thanks, Michel.

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