Posted on 05/19/2016 7:18:57 AM PDT by Kaslin
This piece was authored by Townhall intern Catherine Dunn.
Coming this December, 4.2 million additional workers will be entitled to overtime benefits. The Obama Administration has pushed the change with great enthusiasm. The Department of Labor’s video, “OVERTIME: It’s About Time” is indicative of the administration’s tone regarding the issue: over cheerful music, Secretary Thomas Perez paints a picture of the new regulation saving millions of workers from exploitation, of the regulation as a wholly positive change that’s long overdue. But it’s not that simple.
In a recent study commissioned by the National Retail Federation, the research firm Oxford Economics found that most employees will not benefit from the new regulations. Even though more will qualify for overtime protections, employers will likely offset the costs of these protections by cutting employees’ hours or by reducing their base wages or benefits, resulting in no net increase in income for these workers. This is not because employers are greedy or evil; it’s simply because they cannot afford to do otherwise. With businesses competing with razor-thin profit margins, there is simply no way for them to somehow conjure the billions of dollars it would take to pay the newly eligible workers time and a half.
The new regulation is not simply ineffective at raising wages—it is also actively harmful to companies and workers alike. Raising the threshold of who is entitled to overtime benefits requires businesses to convert salaried employees to hourly workers, which means millions of dollars spent updating payroll systems to track their hours—millions of dollars that might otherwise be used to hire new workers or raise workers’ wages voluntarily. As managers are exempt from the new overtime protections, the rule incentivizes employers to create new managerial positions, resulting in a more hierarchical work environment. Employees lose out as well. Barred from working overtime, they lose the flexibility to continue working on a project that interests them, to show their dedication to employers and thus position themselves well for promotions.
Some might look at these unintended consequences and ask, “So what?” They view the issue of overtime as a cut-and-dry moral issue that should be enforced, regardless of whether the effects are not as rosy as one might anticipate. “If you work overtime, you should actually get paid for working overtime,” Vice President Biden said in support of the edict.
But asserting an idealistic “should” as grounds for far-reaching regulations on the federal level, as stringent and invasive as they are sprawling, is more than inadequate when those same regulations hurt the very people they are intended to help. We live in a world where results matter more than intentions, but the Obama Administration has continually acted as if the opposite were the case. Back in 2009, Charlie Gibson asked Obama why he was in favor of raising the capital gains tax even though more revenue would be garnered by leaving it the way it was. “Well, Charlie,” Obama said, “what I’ve said is that I would look at raising the capital gains tax for purposes of fairness.” For the Obama Administration, “fairness” overrides what is helpful and what is hurtful. It’s saying the same thing now except on the issue of overtime.
But how is the abstract notion of fairness more important than the very real employers and employees who will be hurt by this mandate? Good intentions do not negate negative consequences. The mandate is a straight-jacket when we desperately need the economy to grow, and no abstract notion of fairness will loosen its bonds.
Yep, Guarantees employers will just hire part time, lower paid, hourly workers over a salaried worker for these type of positions....
Never, ever, ever thought I would agree with anything Obama did. But I think I do on this.
I worked in a field where my employer abused the hell out of me on salary to do anything and everything that was NOT management. IMHO the abuse had gotten to be so widespread, somebody had to do something.
I worked tons of unpaid overtime because the company did not want to hire additional part-time help. If they had done so to cut my workload I would have gladly taken that trade-off.
It would really help our side to get out in front on one of these issues from time to time. Keep your Milton Friedman free-market ideological purity if you must....it’s a sure-fire loser at the ballot box.
Also guarantees that some business people will hire NO employees at all. It will be MORE profitable for small fry like myself to limit growth to that which can be handles all by myself.
I work on average 55 hours per week, enjoying my little kingdom, where I am king. It is true, “It is good to be the KING.”
This intrusion into private business will absolutely prevent the creation of hundreds of thousands of job opportunities.
I have been Self Employed running my own business for over 30 years, 8 hours a day for me would be Part Time.
The Executive Moron should know that he can’t make rules like this until he’s in control of the companies (Full Fascism) and can prevent their (predictable to anyone but him) avoidance reactions, his edicts will hurt more than help.
I can appreciate your case but will it do more harm than good? That has been the case with the Zero to date. One poorly though out act after another.
This wouldn’t have anything to do with increased taxes on that target wage....
I betting the employee would see little to nothing.
Another codicil is added to Directive 10-289.
Did you think about looking for another job?
Overtime pay for salaried employees?
Two word comment:
Business Software.
Also note that working unauthorized overtime is usually a firing offense, even within the Federal Gubermint. Thus when the clock ticks over, drop what you are doing and go home. Even if it takes you an hour the next day to get back to the point you were at. And forget signing in from home to check email or the status of a computer run. Productivity costs will be enormous.
Look, too, to the conversion of knowledge workers to independent contractors. Companies get themselves out of the specter of overtime pay and shed the cost of benefits. Employees find themselves paying both sides of Social Security, replacing their health insurance and other benefits, and filing a business return. The workload remains the same but their income goes down dramatically.
“But how is the abstract notion of fairness more important than the very real employers and employees who will be hurt by this mandate?”
“Fairness” is just a Marxist code word for class warfare. They don’t care about the results of the program, as long as it punishes their enemies. If it also damages our economy, then that is an added benefit to them, because they also want to destroy all capitalist economies.
Knew this was coming, in one form or another.
Roughly two years ago the cries by womyn who ‘thought’ they wanted to be in managerial positions, started to complain of the hours they had to put in to get the job done.
Most everyone is aware that long hours are required for any responsible position, and that managers are paid by the year, not by the hour. It comes with the territory, as they say.
But the corporate whiners and complainers will one day find out that even they can and will be replaced by robots. Then they can join the former Burger King workers in the unemployment line.
All I can say is that this is what happens when business people do not exercise a reasonable level of common sense on such matters.
If you abuse your employees, day after day for years, throughout a 300 store chain, and all of your competitors are doing likewise....eventually you generate a backlash.
And some opportunistic politician like Obama will be there ready to pounce on it.
Conservatism preaches that people should police themselves.
In reality few do.
Would you have benefited from this change? All it does is raise the salary threshold where you would have been converted to an hourly worker so you could be paid overtime.
In today's dollars, it was raised from $23,660 to $47,476. Would that have affected you?
There are also a lot of non-managerial job roles that are exempted. I won't go through all of them, but you can find it here:
https://www.dol.gov/whd/overtime/final2016/
I haven't collected overtime pay since I was in high school. But, I worked far more than 40 hours a week, and I was never a manager. But, I was compensated fairly and I was never laid off, despite multiple rounds of layoffs throughout my career.
Yes, I would absolutely have benefitted from this change.
I would have either gotten overtime pay (frankly I think it unlikely I would have gotten much), OR they would have cut my work week back to a more reasonable number of hours.
As I was married with a young family (baby + one on the way) that time would have been invaluable.
And some young people would have gotten part-time jobs because the company would have had no choice but to add some payroll to get the stocking and sweeping done that I was no longer doing for free.
Would my job be eliminated? Not likely. Someone had to show up every day with a key and open the door.
Abusing my exempt status allowed upper management to shave a minimal amount off of store payroll, which allowed them to qualify for their huge quarterly bonus. It is that kind of thinking, quarter after quarter, year after year, chain after chain....that creates political conditions resulting in government doing this.
Dear Mr. Obama. Thanks a lot. Bill
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