Thursday, March 13, 2014


Obama to force businesses to pay more employees overtime

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Unlike his various “fixes” for ObamaCare, there actually is some statutory basis for this move. In both cases, though, he’s following the same rule: Even if the policy isn’t good, the politics are, and that makes it worth doing.

It’s a logical corollary to his push to raise the minimum wage. If, in the name of fairness and income equality, we can tell businesses how much to pay their lowest-ranking employees, we should also tell them how much to pay their middle managers, no?

Under current federal regulations, workers who are deemed executive, administrative or professional employees can be denied overtime pay under a so-called white-collar exemption.
Under the new rules that Mr. Obama is seeking, fewer salaried employees could be blocked from receiving overtime, a move that would potentially shift billions of dollars’ worth of corporate income into the pockets of workers…
In addition, Mr. Obama will try to change rules that allow employers to define which workers are exempt from receiving overtime based on the kind of work they perform. Under current rules, if an employer declares that an employee’s primary responsibility is executive, such as overseeing a cleanup crew, then that worker can be exempted from overtime.
Currently management can avoid paying you overtime if your duties are “executive” (i.e. supervisory) and if you make more than $455 per week. O wants to raise that salary cut-off so that lower-ranking “executives” get time and a half just like the people they’re supervising. New dilemma for businesses, then: Do they bite the bullet and pay extra to middle managers who work overtime? Or, in the name of keeping costs down, do they decide to be sticklers about hours?

First of all, nobody is guaranteed a pay increase as a result. Back when I was briefly in the Newspaper Guild, an older employee explained his real view of the utility of overtime laws: They force managers to schedule more carefully, to avoid cost overruns. As a relatively highly paid young reporter with zero control over my schedule, that made sense.
But that also means non-exempt employees will be watched more closely to avoid tripping the sort of litigation threat that increasing numbers of labor lawyers are looking out for. Working at home could become taboo, since the employer has more difficulty monitoring hours and working conditions. Employees who harbor the perhaps foolish idea that by working hard and taking on greater responsibilities they can move up in the organization will instead be told to go home and relax.
Less work — except for labor lawyers, who’ll be litigating these new regs to the last dotted “i”. Actually, “less work” is a nifty summary of Obamanomics to date: On top of massive long-term unemployment that’s persisted throughout our “recovery,” Obama’s minimum-wage hike would cut 500,000 people from the work force and his pet health-care law would encourage another 2.5 million to shake off the shackles of “job-lock” and ease themselves out the door. Hopefully Jared Bernstein’s right that there’ll actually be extra hiring because of this move as managers look to avoid overtime costs for one “executive” by bringing more “executives” onboard to fill out shifts. But then that assumes that there’ll be no offsetting cost-cutting, including payroll, as the new hires are brought on.

Like I said, though, good politics. Nothing’s going to save Democrats in November but maybe the extra income for some middle managers will soften the blow at the polls. And it pays for O to do something splashy occasionally to polish the Dem brand as the party of the middle class. Republicans with megaphones like Mike Lee and Rubio are looking to make inroads with blue-collar voters. The guy with the bully pulpit can do more to bigfoot them than anyone else.
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