By Benjamin Goad - 01/27/14 12:32 PM EST
The Obama administration should exert its executive authority to overhaul regulations governing overtime pay as a means of lifting wages for millions of Americans, according to a new policy memo issued by the Economic Policy Institute.
The Labor Department has the power to raise the threshold for people who are exempt from overtime pay from those making from $455 per week to workers making $970 per week, or $50,440 a year,” argues Ross Eisenbrey, vice president of the left-leaning think tank.
The 1938 Fair Labor Standards Act requires that most workers be paid at 1.5 times their regular rate of pay for working more than 40 hours in a week, But employees designated as “professionals, administrators, or executives,” can be exempt from the regulations if they earn above $455 every week.
The threshold has remained steady, as inflation has risen over the years.
“American workers are more productive and yet their wages have been flat,” said Eisenbrey. “Workers are working longer hours but getting the same paycheck.”
The group’s call comes ahead of this week’s State of the Union address, in which President Obama is expected to detail a host of planned executive actions in the coming year.
Eisenbrey said action on overtime would fit the bill.
“This change could be made by the Secretary of Labor and would not require approval from Congress, making it an easy way to avoid Congressional obstruction and lift Americans’ wages,” he wrote.
Obama is also said to be considering lifting the federal minimum wage for workers at firms who do business with the government.