Danny Felix says he often worked weekends driving a shuttle bus back and forth from a parking lot to Washington’s Union Station, pushing his schedule beyond 60 hours some weeks.
Felix, who said he was denied overtime pay, joined other workers and business owners Thursday at a White House ceremony as President Obama signed a measure to make more people eligible for the extra pay.
Worker advocates applauded Obama’s focus on the issue. Last week, he requested funding for 300 new Labor Department investigators to ensure that workers are paid what they’re due.
“The extent to which people’s rights are being violated is really quite extraordinary,” said Ross Eisenbrey, vice president of the Economic Policy Institute, a Washington-based nonprofit group affiliated with labor. “Surveys say 30 percent of employers are violating minimum wage and overtime provisions.”
The focus on wage and hour rules has employers bracing for more investigations by an administration they perceive to be biased in favor of workers, according to Marc Freedman, director of labor law policy at the U.S. Chamber of Commerce.
“I’m not going to say that they’ve gone too far,” Freedman said in an interview. “Let’s just say that this administration has a determined focus on enforcement.”
“Unfortunately, today millions of American aren’t getting the extra pay they deserve,” Obama said at the ceremony where he directed the Labor Department to revise overtime rules. “I’m going to do what I can on my own to raise wages for hardworking Americans.”
While not identifying specific changes, Obama said the threshold below which overtime pay is guaranteed is too low. Obama praised companies such as Costco Wholesale Corp. and Gap Inc. for paying higher salaries to keep workers and boost productivity.
Labor Secretary Thomas Perez will ask department staff to collect data from workers, employers and others over the next several months, a department spokeswoman said in an e-mail. A proposal will be published later this year, she said.
“What we really need is a stronger economy, and also simplicity,” said Diane Swonk, chief economist at Mesirow Financial Inc. “Inequalities don’t get helped by more complexity in the tax code, more complex federal programs.”
One measure of a need for change is a jump in class-action lawsuits that allege violations of labor laws, according to Gerald Maatman Jr., chairman of the class-action group at the law firm Seyfarth Shaw LLP. There were 7,764 federal labor law cases filed last year compared with 1,854 in 2000.
“Obama has put a lot of resources into enforcement. Now he’s going to the next level,” Maatman said.
Obama’s budget proposal to Congress released last week requests a 19 percent increase for the department’s Wage and Hour Division, with an added $36.5 million to enforce minimum wage, overtime, child labor, and other laws under the Fair Labor Standards Act.
The department’s 1,200 labor-standards investigators cover 130 million workers in more than 7 million workplaces, according to Seth Harris, who resigned in January as acting secretary of labor. Limited resources means they must focus on the worst offenders leaving many complaints unresolved.
The overtime initiative aims to rewrite rules issued by President George W. Bush in 2004 that set $455 per week as the threshold for what constitutes a white-collar worker for purposes of overtime pay. Employees making more than $455, or about $23,500 a year, must meet other eligibility requirements to be paid overtime.
Obama is also seeking changes to rules that allow employers to exempt workers from the overtime requirement, Harris said.
About 10 million workers might benefit from the rule if it applied to people making less than $50,000 a year, the Economic Policy Institute said.
“While specifics have yet to be released, it’s clear that this change would cost manufacturers and does nothing to achieve the goal of job creation,” Joe Trauger, vice president of human resources policy at the National Association of Manufacturers, said in an e-mail. “This administration fails to understand the financial stress and pressure they are placing on businesses.”