President Obama / SAUL LOEB, AFP/Getty Images
WASHINGTON - President Obama ordered a new set of overtime work rules on Thursday that could have both economic and political consequences.
In a ceremony at the White House, Obama signed a presidential memorandum authorizing the Labor Department to examine changes that would expand the number of employees eligible for overtime pay.
Some Republicans as well as the U.S. Chamber of Commerce and other business groups are objecting to new overtime rules, saying they will lead to fewer hours for workers and fewer jobs overall.
Obama said businesses are classifying all kinds of employees as professional or administrative - including some who make as little as $23,660 a year - thereby exempting them from overtime requirements under current law.
"Millions of Americans aren't getting the extra pay they deserve," he said.
Putting new rules into place could well be a long and arduous process, if the experience of the George W. Bush administration in 2003 and 2004 is any guide.
The Bush administration increased the salary limit to qualify for overtime to $455 a week, a figure that labor unions and Democrats then and now called too low. Critics also fought the Bush administration over the definitions of "professional," "administrative" and "executive" employees who would be exempt from overtime rules.
Political roles are likely to be reversed this time around as business groups and congressional Republicans object to Obama administration efforts to increase the number of employees eligible for overtime pay.
"It's going to be hard, it's going to be controversial," said Tammy McCutchen, who oversaw the Bush administration's overtime revamp as a Labor Department official. "But in the end they have the authority to do what they want to do."
It took the Bush administration two years to make its changes, and McCutchen predicted that the Obama team will want to develop new rules in 12 to 18 months. She said they will likely want it wrapped up well before the 2016 election so that new rules can be "well embedded" by the time a new president takes office.
Obama and aides said the new overtime order is part of an effort to address the nation's income gap through higher wages. Obama is also pressing Congress to increase the federal minimum wage from $7.25 per hour to $10.10 per hour.
The president has said he would take executive action, if necessary, to circumvent congressional Republicans who have blocked his initiatives, including a minimum-wage hike.
House Speaker John Boehner, R-Ohio, who has criticized Obama for some of his unilateral actions, said all officials should focus on creating jobs.
New overtime rules won't do anything for people who are unemployed, he said.
"The president's policies are making it difficult for employers to expand employment," Boehner said. "And until the president's policies get out of the way, employers are going to continue to sit on their hands."
Obama's economic aides will spend the next several months developing new rules for overtime pay, which types of employees might be affected by them, and how they might affect overall hiring decisions.
New rules might not take effect until next year.
During the signing ceremony, Obama noted that "not everybody is going to be happy" with new regulations, but hard work should be rewarded.
"We're going to consult with both workers and businesses as we update our overtime rules," Obama said.
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