From The Conversation
Late last month, President Barack Obama took a step around the longstanding congressional gridlock over labor and employment policies by announcing a plan to boost the salary threshold governing overtime from US$23,600 to $50,440 and to index it to inflation.
Essentially, that means white collar workers in that salary range, currently exempt from being paid overtime, would get 1.5 times their hourly wages for anything over 40 hours.
The administration estimates this action will extend coverage to an additional five million workers who will either receive overtime pay or work fewer hours at the same salary, with some of their extra work shifted to part- or full-time hourly workers. Either way, the workforce and the economy will record a small win in efforts to raise wages and reduce income inequality.
I’ve been immersed in this issue for decades, including as a member of the Clinton administration’s Commission on the Future of Worker Management Relations in the early ‘90s and as codirector of the MIT Sloan Institute for Work and Employment Research.
This experience has convinced me that the president’s plan should be just one in a series of executive actions that he, and the person who succeeds him, should take if Congress continues to be incapable of updating our employment policies to catch up with changes in the economy, workforce and the way people work today.
The new overtime rules are long overdue. As far back as 1994, those of us on former President Bill Clinton’s Commission on the Future of Worker Management Relations recognized that the salary threshold and other rules governing who was covered and who was exempt from overtime were outdated, overly complex and no longer reflected how work is done in many organizations.
Read the full post at The Conversation.
Thomas Kochan is the George Maverick Bunker Professor of Management, a Professor of Work and Employment Research and Engineering Systems, and the Co-Director of the MIT Sloan Institute for Work and Employment Research at the MIT Sloan School of Management.