Obama administration defends new overtime rules after employer backlash

http://www.theguardian.com/us-news/2015/jun/30/obama-overtime-rules-employers-backlash

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The Obama administration has hit back at ‘Chicken Little’ critics of new overtime rules, as business groups warned that the proposal to tighten exemptions for junior managers would hurt their career prospects.

An estimated 5 million lower-paid US employees will benefit from the rule change, which raises the salary limit used to decide who qualifies for mandatory overtime pay if they work more than 40 hours a week but are deemed to work as supervisors.

The administration argues that many employers are currently exploiting loopholes originally designed for senior managers by depriving more junior colleagues of overtime, and had little sympathy for business owners as it announced the reform on Tuesday.

“Every time we have a conversation about levelling the playing field for workers, we hear that the sky is falling, the sky falling,” Labor secretary Thomas Perez told reporters.

“FDR, when he was talking about the fair labor standards act referred to opponents of the Act – which established a 25 cent minimum wage – as ‘calamity hollers’,” he added.

The proposal to use Obama’s executive authority in this way was first announced over a year ago, but confirmation of the details this week has prompted a backlash from some employers.

“If allowed to stand, the one-size-fits-all proposal issued today will harm chain restaurant managers’ career advancement, eliminate key management positions and have a negative impact on customer service and workplace morale,” said Rob Green, director of the National Council of Chain Restaurants.

“We need policy that encourages workplace advancement and this is a step in the wrong direction. On the heels of a recession and high unemployment, we shouldn’t be stifling opportunities for career growth.”

But the administration argues that the rule “goes to the heart of what it means to be middle class in America” and will increase wages by between $1.2bn and $1.3bn, as well as generating more employment to compensate for those who receive extra time off instead of pay rises.

“When I was growing up in Buffalo, New York, if one of my friends’ parents was a manager, that meant they were in the middle class: it meant they had a responsible job, they supervised people,” said Perez.

“They may have worked more than 40 hours a week, but they received a fair salary that was befitting of their responsibilities. This salary enabled them to own a house, feed and educate their kids, build a nest egg for retirement and even go on vacation once in a big while.

“Today all too many managers are working hard and falling behind. They can barely make ends meet,” he added.