In a state where debate rages over whether wages are adequate, Vice President Joe Biden on Wednesday said expanding overtime rules to cover some five million more white-collar workers is about economic and political stability and fairness.
Speaking in Columbus at the corporate headquarters of Jeni’s Splendid Ice Creams, Biden noted that many salaried workers get shortchanged because they are misclassified as managers and paid for just 40 hours a week when they actually put in far more hours.
“Folks, we have to right this ship and this is a very important piece in doing it because millions of people are going to start to get paid — not more than they deserve — what they deserve,” Biden said. “Mark my words, the benefits are going to be beyond the compensation. It’s going to be that maybe we’re getting things right and maybe we’re starting to treat people more fairly.”
Beginning Dec. 1, overtime protections will be guaranteed for some five million white-collar workers, including more than 130,000 in Ohio.
Currently, workers making as little as $23,660 a year can be exempt from making overtime. The Obama administration is bumping that threshold to $50,440 a year with the aim of extending overtime eligibility to middle managers, according to the U.S. Department of Labor.
Since 1938, the federal Fair Labor Standards Act has required employers to pay workers a time-and-a-half rate for hours worked in excess of 40 in a week. In 1975, nearly two-thirds of full-time salaried workers were eligible for overtime pay but now the vast majority do not qualify because the salary threshold has only been updated twice in the past four decades, according to the White House.
“The new overtime rule is a welcome and long overdue move that will ensure more working people are paid for the work they do,” said Tim Burga of the Ohio AFL-CIO, a network of unions. “It has been 40 years since this regulation has been properly adjusted. Over that period, wages have dropped or stagnated for far too many.”
But business groups including the U.S. Chamber of Commerce and the National Federation of Independent Businesses predict that instead of boosting pay, worker hours will be more closely monitored and cut. The proposed rule changes generated 300,000 comments to the Department of Labor.
U.S. House Speaker Paul Ryan, R-Wisconsin, said in a statement that the new overtime rules would be a disaster.
“This regulation hurts the very people it alleges to help,” Ryan said. “Who is hurt most? Students, non-profit employees and people starting a career.
“By mandating overtime pay at a much higher salary threshold, many small businesses and nonprofits will simply be unable to afford skilled workers and be forced to eliminate salaried positions, complete with benefits, altogether,” Ryan wrote.
The issue of wages has been a pain point for many in Ohio, where pay levels have cratered in the wake of huge manufacturing losses, and a rallying cause for Democrats during the presidential election. As he introduced Biden, U.S. Sen. Sherrod Brown, who is often mentioned as a possible vice presidential candidate on the Democratic ticket, said the revised rule means “literally tens and tens of thousands of Ohioans will get a raise without question.”
During his visit Biden praised the founder of Jeni’s Splendid Ice Creams, Jeni Britton Bauer, for her business practices but also revealed a hidden motive for stopping there: “I love ice cream,” he announced.
Founded by Bauer in 2002, Jeni’s now has shops in Columbus, Cleveland and metro areas in six other states.
Biden was last in Ohio in April, to headline a fundraiser for former Gov. Ted Strickland, who is trying to unseat Republican Sen. Rob Portman in November. Accompanying him from Washington was Brown and Labor Secretary Thomas Perez.
Information from the Associated Press is included in this report.
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