Millions could get a raise under Obama administration's new overtime rules

[kscarbel2]

The Guardian  /  May 18, 2016

The salary threshold for workers to qualify for overtime pay will double to $47,476 by December 2016, but the new rule has faced opposition

More than four million working Americans could get a bigger paycheck by the end of the year, thanks to a new overtime rule to be finalized by the US Department of Labor on Wednesday.

Previously, only salaried workers who earned below $23,660 were eligible for overtime pay. As of December 2016, that threshold will double and be set at $47,476 a year.

“If you work overtime, you should actually get paid for working overtime,” vice-president Joe Biden said. People who work more than 40 hours a week should be paid time and a half of their regular wages for the extra time. “In 1975, 62% of workers automatically qualified for overtime. Today, that’s 7%. Not a mistake, 65 to 7 – and you wonder why the middle class is struggling.”

US secretary of labor Tom Perez said the current salary threshold is “woefully out of date” and that had it kept up with inflation, it would have been close to $57,000 a year by now. The rule was last updated 12 years ago.

In future, the threshold will updated every three years. The labor department expects that due to such adjustments the threshold will grow to more than $51,000 by January 2020.

“More than four million workers are either going to get paid more or get their time back to raise their family, go back to school or retrain to get a better job,” said Biden. The Obama administration predicts that the workers who will benefit from the new rule, such as retail manager and book keepers, will earns as much as $12bn more in higher wages over the next decade.

Not everyone, however, believes that the new rule will help US economy move forward.

In an attempt to block the new overtime rule from taking effect, Republicans in Congress led by South Carolina senator Tim Scott and Michigan congressman Tim Walberg have proposed a new bill that would require US labor secretary Tom Perez to carry out additional analysis on how the new rule would affect small businesses and their employees.

“The Obama administration’s decision to drastically redefine overtime will hurt our workforce and our employers. It will lead to reduced hours, confusion for job creators, and will limit growth opportunities for employees,” Scott said in March, when he introduced the bill in Congress.

A coalition of more than a dozen organizations, including Americans for Prosperity and Competitive Enterprise Institute, penned a letter to the US congress on Tuesday in support of the bill.

“We write to express our strong support for the Protecting Workplace Advancement and Opportunity Act, and all efforts to defund, block and otherwise nullify the Obama Administration’s effort to change our nation’s overtime rules,” they wrote.

On a call with reporters, Perez pointed out that prior to finalizing the rule the Obama administration listened to more than 270,000 public comments, many of which came from the US businesses.

As a compromise, he said, the labor department made no changes to the “duties test” and allowed bonuses and incentive payments to count toward up to 10% of the new salary level. The “duties test” is a set of requirements that salaried workers must meet in order to be exempt from overtime pay. For example, it is not enough to just be classified as manager or a supervisor. These managers must actually be in charge of two or more full-time employees during a fraction of their work week in order to be exempt.

Biden and Perez both pointed out that some US workers are misclassified as supervisors and miss out on overtime pay. Perez pointed out that when he was growing up, being a manager was a good job that meant being middle class. Managers worked long hours but were compensated for it.

“These good paying middle class jobs were not a fluke brought about by an invisible market forces. They were good paying middle class jobs by design,” he said. While the White House won’t adjust the duties test, it is clarifying it in hopes of expanding overtime pay to more workers. According to Perez, there are an estimated 750,000 workers who are incorrectly classified as overtime exempt.

The rule will go into effect on 1 December and the US labor department will immediately “pivot” to compliance assistance in order to help US businesses to meet its requirements by that time.

“We don’t go out there with our ticket books trying to play the gotcha game,” Perez said on Tuesday. “We want to work together with employers.”

 

[RowdyRebel]

... prior to finalizing the rule the Obama administration listened to more than 270,000 public comments, many of which came from the US businesses ...

 

Funny thing about a business is, if they WANT to do this, and they can AFFORD to do this, they WOULD be doing it.  If they cannot afford to do this, especially at the same time they are hit with a ridiculous minimum wage increase, then people will simply lose their jobs in order for the business to be able to make payroll.  The alternative is for products to be prohibitively expensive for the consumer, leading to declining sales and layoffs as a result of reduced demand.  Either way, the worker loses.

 

Personally, I don't agree with ANY minimum wage.  If a person desires to work for next to nothing in an effort to acquire certain skills or experience which would then allow them to command a higher wage, then that should be their right to do so.  If a business is unwilling to pay a wage compensatory to what the job is actually worth, they should also have that right because NOBODY is forced to work for them, and ANYBODY is free to open up a competing business and offer a higher wage to attract those employees.  If you can't "find" somebody willing to pay you what you think your time is worth, you have the ability to go into business for yourself doing anything you have the knowledge or skill to do (that people are willing to pay for, of course).  NOBODY is forcing anybody to work for anybody else.  Besides, the minimum wage is just that....a MINIMUM....a starting point for somebody with NO education, NO knowledge, NO job skills, NO experience.  It was never intended to be a "living wage".  If you want a "living wage", get off your ass and acquire some education, experience, and skill to make yourself WORTH that "living wage" to a prospective employer.  If you're 40 years old and still working minimum wage jobs, it is by choice.

 

Bottom line, if outside forces (i.e. the government) dictate that a job ought to pay more than it is worth to the employer to have done (as in it is incapable of producing a profit for the employer at the new rate of pay), then the job gets eliminated.

[Tbear]

I can't agree more with you !!!

[41chevy]

Seems the plan works...more gimmie people created. The McDonalds item for the franchise pretty much says it all.

Watched a 30 something woman saying she can't buy her own "crib" or takes a cruise cause I only gots nine Dollar an hour . . .she called that chump change.   Get an education or acquire a skill so you can get a better paying job.  $15.00 and hour and they need pictures on the equipment key pads because they can't read.

Biden should be almost aware enough for his overtime quest, that the number of people getting it went down from 62% to 7%  because of the Healthcare laws eliminating many full time jobs to defer obamacare costs. FYI according to the D.O.L. 39.9 hours a week is a part time job and no benefit or OT is required except healthcare  and under 29.9 hours even healthcare in not required.  

http://www.investors.com/politics/editorials/uc-berkeley-touts-15-minimumwage-then-fires-hundreds-of-workers-after-it-passes/

 

http://abc7chicago.com/business/wendys-plans-to-replace-workers-with-self-service-kiosks/1341585/

 

http://www.grubstreet.com/2016/04/ex-mcdonalds-ceo-says-15-wage-will-wipe-out-jobs.html

 

Edited May 18, 2016 by 41chevy

[hatcity]

11 hours ago, RowdyRebel said:

 

 

 

Funny thing about a business is, if they WANT to do this, and they can AFFORD to do this, they WOULD be doing it.  If they cannot afford to do this, especially at the same time they are hit with a ridiculous minimum wage increase, then people will simply lose their jobs in order for the business to be able to make payroll.  The alternative is for products to be prohibitively expensive for the consumer, leading to declining sales and layoffs as a result of reduced demand.  Either way, the worker loses.

 

Personally, I don't agree with ANY minimum wage.  If a person desires to work for next to nothing in an effort to acquire certain skills or experience which would then allow them to command a higher wage, then that should be their right to do so.  If a business is unwilling to pay a wage compensatory to what the job is actually worth, they should also have that right because NOBODY is forced to work for them, and ANYBODY is free to open up a competing business and offer a higher wage to attract those employees.  If you can't "find" somebody willing to pay you what you think your time is worth, you have the ability to go into business for yourself doing anything you have the knowledge or skill to do (that people are willing to pay for, of course).  NOBODY is forcing anybody to work for anybody else.  Besides, the minimum wage is just that....a MINIMUM....a starting point for somebody with NO education, NO knowledge, NO job skills, NO experience.  It was never intended to be a "living wage".  If you want a "living wage", get off your ass and acquire some education, experience, and skill to make yourself WORTH that "living wage" to a prospective employer.  If you're 40 years old and still working minimum wage jobs, it is by choice.

 

Bottom line, if outside forces (i.e. the government) dictate that a job ought to pay more than it is worth to the employer to have done (as in it is incapable of producing a profit for the employer at the new rate of pay), then the job gets eliminated.

AND..show some initiative. Not punch in at 1 minute to 8. Not head out at 3:58.

[41chevy]

Small Businesses and Nonprofits Ill-Equipped to Handle DOL's Overtime Rule

Trey Kovacs • May 17 2016

Today, the Senate Small Business & Entrepreneurship Committee discussed the Department of Labor’s proposed overtime rule’s impact on small businesses and nonprofits. As Politico reported, a final rule may be published as early this week.

Hopefully, regulators at the DOL take to heart the concerns aired at the hearing. Such a dramatic change—the salary exemption threshold would increase to $50,440 from $23,660, a 113 percent jump—in the amount of overtime eligible employees will hit small business harder than their Big Business counterparts, which have law firms on retainer and numerous human resource officials to crunch the numbers.

However, any changes to soften the blow on small business is unlikely, since the DOL views the rule changes as straightforward and easy to comply with. The DOL predicts that the 7.4 million affected establishments will only need a couple of hours at most to figure out and implement the rule changes.

Tammy McCutchen, former DOL Wage and Hour administrator, in written testimony, raises issue with DOL’s cavalier attitude towards small business compliance:

In reality, it will take far more than an hour or two – or even ten – to comply with the final rule. Since leaving the Department in 2004, I have assisted dozens and dozens of employers to reclassify employees from exempt to non-exempt. In my experience, reclassifications can take six months or more to achieve and hundreds of hours spent by business leaders, human resources professionals and outside attorneys.

…

Frankly, I am surprised that the Department would encourage any employer to spend so little time ensuring compliance with the FLSA.

Unfortunately, it is likely the DOL will only give employers 60 days to comply with the rule once it is finalized.

In 60 days, a business must inspect its entire workforce and determine how many salaried employees will no longer be exempt from overtime pay. Then an employer must undertake a fact-finding mission to determine how many hours these employees work, which is not easy task since they currently do not need to track these workers’ hours. Once the hours worked by the salaried workforce is established, a cost-benefit analysis is needed to figure out how many employees will receive a raise above the proposed salary threshold, demoted to hourly employees, or paid overtime at their current salary level. These are just a few of the many decisions an employer must make to comply with the rule.  

Another issue with the DOL rule is that it is one-size-fits all nature, which does not take into account the vast cost of living differences throughout the country. In McCutchens testimony, she attached a great graphic (p. 6), which is a U.S. map that illustrates the “Percent of Salaried Full-Time Workers Earning Below $970/week.”

The map shows that businesses in low wage states will face greater hardships. In Connecticut, only 27.6 percent of salaried employees earn below the new $50,440 salary threshold. In contrast, in Louisiana, over 50 percent of salaried employees will become eligible for overtime pay. But low wage states like Louisiana also have a lower cost of living. According to PayScale.com, an online salary, benefits, and compensation information company, shows that it costs 23 percent less to live in Baton Rouge, Louisiana, than in Hartford, Connecticut.

Also at the hearing, Nancy Duncan, associate vice president of human resources at the nonprofit Operation Smile, said “the rule will increase the nonprofit’s payroll cost by close to $1 million a year.”

To compensate for the increased cost, Duncan feared that Operational Smile could cut benefits to contain costs.

Other nonprofits have voiced their concerns over the costs of the new overtime rule.Public universities, who face political pressure to keep tuition affordable, fear the added costs will force reductions to student services, cuts to employee benefits, and limits to hours worked in ways that will hinder their educational mission.

Organizations that provide services to the disabled community, primarily funded via Medicaid, face an estimated $1.05 billion in additional costs, according to analysis by health research firm Avalere Health. These workers provide vital services to those in our communities most in need of help. However, without an increase in Medicaid funds, many of these nonprofits will not be able to increase the revenue they will need to deal with the increased labor costs from the new overtime rule.

If small businesses and nonprofits decide the best way to handle the costs of the overtime rule is to reduce benefits, it contradicts the purpose of exempting salaried employees from overtime. Congress made white collar salaried employees exempt from overtime requirements because they were paid well above the minimum wage, received more comprehensive benefits, and had more opportunity for career advancement. All of that is still true today, but may not be the case under the DOL’s rule.

Ultimately, the overtime rule is a poor mechanism to increase wages. All the rule does is add to the already huge regulatory burdens on employers. A better way to increase wages would be to provide regulatory relief to employers, which would free resources to invest in technology or research that increases productivity and would lead to higher wages. 

Edited May 19, 2016 by 41chevy

[other dog]

On 5/18/2016 at 7:06 PM, hatcity said:

AND..show some initiative. Not punch in at 1 minute to 8. Not head out at 3:58.

Really! At least pretend like you're a little bit appreciative of what you have too- none of that (boss man)- "Would you change that burned out light bulb for me please?"

(employee)- "Naw,that's not my job, I was hired to keep the waste baskets emptied, not change light bubs."

[mowerman]

Same old balony...the system sucker didn't create any jobs  so now he.s come up with a new caper to make more and suck more outa the buying public wow what a guy...bob