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Praise, worry on overtime growth

Obama expected to raise eligibility for salaried staffs

A Fort Wayne labor leader says a move to bolster overtime pay rules is overdue.

President Barack Obama will direct the U.S. Labor Department to strengthen overtime protections for millions of workers, a White House official said.

The push is meant to help salaried workers, such as fast-food shift supervisors or convenience store managers, who may be expected to work more than 40 hours a week without overtime pay.

The proposed change is part of Obama’s effort to focus on closing the gap between the wealthy and the poor, which also includes a call to raise the federal minimum wage from $7.25 an hour to $10.10.

Under the changes Obama is seeking, the Labor Department could raise the pay threshold for workers covered by overtime rules. Currently, salaried workers who make more than $455 a week are exempt from overtime.

“There’s been an erosion of overtime standards for the past several years,” said Tom Lewandowski, president of the Northeast Indiana Central Labor Council, AFL-CIO. “This is long overdue.”

The proposal is likely to be met with opposition from some Republicans and members of the business community who say the private sector should have flexibility in setting wages.

Lewandowski said the issue isn’t just about pay; there are quality-of-life issues to consider.

“In most cases, when a worker is asked to work overtime, it isn’t a request, it’s a demand,” he said. “That means they’re taking away time they would have spent with their families.”

Company leaders need to do a better job managing their staffs’ workload, Lewandowski said.

“They should do that instead of dropping off their responsibilities to their workers,” he said.

It’s not that easy, said Matt Rogers, general manager and executive chef of 800 Degrees pizzeria in Fort Wayne. Rogers said he is one of four salaried workers who average 60 hours a week.

If the government increases overtime pay protections, it could result in several consequences, Rogers said.

“We have tight margins that we have to stay within,” he said. “What will probably happen is we’d have to learn to get by with fewer workers, which means you’re going to have a lot of tired people.”

Companies could also raise prices on customers, Rogers said.

“You have to be careful with that, because you might price yourself right out of business,” he said. “I love the capitalist system, but it is a vicious circle.”

Obama is expected to announce the proposed regulation changes today. It’s part of his self-described “year of action,” a series of economy-focused executive decisions that don’t require congressional approval.

The White House official said Obama is authorized to take this action on this own under the Fair Labors Standards Act, which Congress passed in 1938. The proposed changes will be subject to public comment before the Labor Department can implement the final rule.

The move was first reported by the New York Times. The official confirmed the announcement on condition of anonymity because the official was not authorized to discuss the directive on the record before the president’s announcement.

The Associated Press contributed to this story.