A proposal by  President Obama would make 5 million more Americans eligible for overtime pay. At the moment those earning $36,660 or under are paid overtime, but the administration wants to increase that to $50,440. Advocates of this change say it’s long overdue. They say workers are often misclassified as “managers” to avoid paying overtime.

The Fair Labor Standards Act is designed encourage companies to hire more workers, instead of squeezing work out of the workers that they have. But many “managers” earn well below $50,000, and if they get overtime it may be seen as a demotion and a disincentive.  In some cases exploitative employers will increase salaries just to the level where overtime is not required. In others “managers” will leave and get hourly paid jobs with overtime. As one manager is quoted as saying, a propos to being salaried:

“As a salaried employee you are signing off to a degree for indentured servitude,  going above and beyond with no additional compensation.”

Traditionally, wage earners are not expected to progress to management.  Or if they are promoted then they go onto fixed salaries.  Companies say that this is the ladder to preferment.  It’s the same in Europe.  But if companies have to increase salaries they might cut out a whole level of management.  All these changes are tricky, but at least Obama is trying to do something for ordinary people!