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GOP: Obama's Overtime Plan 'Filled With Job-Killing Incentives'

By    |   Tuesday, 30 June 2015 07:05 PM

Republicans Tuesday slammed President Barack Obama's plan to expand overtime for as many as five million American workers, with presidential candidate Rick Perry saying that the move was "filled with job-killing incentives that will drastically increase the cost of hiring new workers.

"Government shouldn't be in the business of mandating how much employers pay, or the level of benefits they provide," said the former Texas governor. "Unlike the federal government, employers don't have the luxury of living beyond their means.

"As businesses are forced to spend more on payroll, those costs will be passed on to consumers in the form of higher prices for everyday goods and services," Perry said.

"Millions of Americans are out of work or have given up looking for work. We need a president who is concerned about the rising cost of living across the country, and who will implement economic policies to make life more affordable — and jobs more accessible — for all Americans."

The Obama administration's long-awaited proposal would make nearly five million more U.S. workers eligible for overtime pay, though Republicans and many business groups say it would force them to cut hours and wages.

Under the proposal, the maximum income a salaried worker could earn and still be eligible for mandatory overtime pay would rise to $50,440 from $23,660, the first significant change in four decades.

"By updating the salary threshold to keep pace with inflation and wage growth, this proposal guards against future erosion of overtime protections while providing certainty for businesses," Labor Secretary Thomas Perez told reporters in a conference call.

Perez said millions of workers would earn an estimated $1.3 billion in additional wages every year. Others would work fewer hours for the same amount of money — and many businesses would create new part-time positions to fill the gap, he said.

Fifty-six percent of those who would benefit in the first year are women, and 53 percent have a college degree, the White House said.

"A hard day’s work deserves a fair day’s pay," Obama wrote in a blog post on the White House website. "That’s at the heart of what it means to be middle class in America."

However, employers can now get around the rules: Any salaried employee who's paid more than $455 a week, or $23,660 a year, can be called a "manager" — and given limited supervisory duties and, thus, barred from getting overtime pay.

That would put a family of four in poverty, Obama said. The level is too low and undercuts the intent of the overtime law.

The threshold was last updated in 2004 and has been eroded by inflation. In 1975, overtime rules covered 65 percent of salaried workers. Now, it's just 8 percent, according to the White House.

Obama plans to announce the proposal on Thursday during a visit to LaCrosse, Wis. It will be open for public comment and made final next year.

Republicans charged that the new plan slashes worker hours, demotes supervisors and potentially cuts wages.

"What Washington owes workers is policies that create better opportunities, more flexibility and enable them to have more control over their work lives," said Senate Labor Committee Chairman Lamar Alexander of Tennessee.

"Just imagine how discouraging this rule will be to the working mother who can no longer negotiate her schedule to, say, work from home when she needs to, or to the young restaurant assistant manager who loses his title and is returned to an hourly job with no more pay — or to the job-seeker who discovers that the only available jobs are part-time?" he said.

In the House, Education and the Workforce Committee Chairman John Kline of Minnesota called the proposal "a missed opportunity.

"It will increase costs on small businesses, make it harder for workers to advance up the economic ladder, and do nothing to address the complexity of the regulations or reduce unnecessary litigation," Kline said in a statement with Rep. Tim Walberg of Michigan, who chairs the workforce protections subcommittee.

"The administration has crafted a regulatory proposal that will stifle productivity and personal opportunity," they said.

Business groups were just as virulent.

"Promoting someone to manager is going to be an expensive proposition for many small businesses, and the result will be less mobility and fewer opportunities for workers at the bottom," said Beth Milito, senior legal counsel of the National Federation of Independent Business. "This is going to be especially difficult for small businesses in small markets where wages are commensurate with the cost of living."

Joe Trauger, a spokesman for the National Association of Manufacturers, said that "the Department of Labor announced the demotion of at least 5 million Americans.

"This proposed regulation is another in a long list of regulatory roadblocks to healthy and robust economic growth and job creation," he said.

"The administration seems to be under the distorted impression that they can build the middle class by government mandate," said David French, a senior vice president for the National Retail Federation. "Turning managers into rank-and-file hourly workers takes away the career opportunities offered by private-sector entrepreneurs and job creators that are the true path to middle-class success.

"This proposal isn’t a law but it certainly reflects one: the law of unintended consequences at a time when the economy and those struggling the most can least afford it," he added.

The Associated Press and Reuters contributed to this report.

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Republicans slammed President Barack Obama's plan to expand overtime for as many as five million American workers, with presidential candidate Rick Perry saying that the move was "filled with job-killing incentives that will drastically increase the cost of hiring new workers.
republicans, react, barack obama, overtime, plan, jobs, workers, labor, economy
Tuesday, 30 June 2015 07:05 PM
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