By Marc Jampole
It was to be expected that conservative politicians and business organizations would complain about the U.S. Labor Department’s new overtime regulation, which mandates that anyone making under $47,476 a year automatically qualifies for time-and-a-half pay for any hours worked over 40 per week. For example, Speaker of the House Paul Ryan criticized the new rule that enables 4.2 million more Americans to receive overtime pay, saying the regulation “hurts the very people it alleges to help.” Business organizations such as the American Bankers Association, the National Retail Federation, the Society of Human Resource Management and the U.S. Chamber of Commerce have all bemoaned the new regulation, focusing exclusively on the problems it will cause for small business and the employees receiving the overtime wage boost. The mainstream news media, of course, has quoted many small business owners complaining about the new reg.
It was to be expected that conservative politicians and business organizations would complain about the U.S. Labor Department’s new overtime regulation, which mandates that anyone making under $47,476 a year automatically qualifies for time-and-a-half pay for any hours worked over 40 per week. For example, Speaker of the House Paul Ryan criticized the new rule that enables 4.2 million more Americans to receive overtime pay, saying the regulation “hurts the very people it alleges to help.” Business organizations such as the American Bankers Association, the National Retail Federation, the Society of Human Resource Management and the U.S. Chamber of Commerce have all bemoaned the new regulation, focusing exclusively on the problems it will cause for small business and the employees receiving the overtime wage boost. The mainstream news media, of course, has quoted many small business owners complaining about the new reg.
One main argument
against paying people extra money when they work more than the normal week sounds
just like what business interests say about raising the minimum wage: that it
will lead to employers hiring fewer people. This
old saw is complete BS, as I have demonstrated before. Virtually all
businesses only hire the minimum number of people needed to do the job, as they
always seek to maximize profit. The result of increasing the number of people
to whom companies must pay time-and-a-half will certainly be to raise the cost
of labor, unless employers try to avoid the additional expense by hiring
additional people at the regular rate to work the hours that they will no
longer give to existing employees. The choice then is that current employees
make more money or the company hires more employees. That sounds like a win-win
for labor.
Here is some more
nonsense the news media has published about the impact of making employers pay
time-and-half to lower-paid employees who work more than 40 hours a week:
·
Employees won’t want to keep track of exact
hours: Many, if not an
overwhelming majority, of employees already keep precise track of their hours
with time cards and time sheets.
·
People work harder for a salary: Whether or not this gratuitous insult of the
working stiff is true matters not in discussing the validity of applying this
blanket statement to the issue of overtime pay. Any good employer develops
quantifiable measurements of job performance. If someone starts to fall below
the performance standards of the job, a supervisor will talk to the employee,
no matter what the reason. It’s easy and legal to fire an employee who
continues to perform below standard when the only reason is because he or she
is trying to work the system to get time-and-a-half.
·
It will make it harder to give employees
flexibility in hours: A
ridiculous claim! As long as an employee is keeping accurate track of hours,
who cares if they came in at 5:00 am so they could leave for their daughter’s
chess tournament at 3:00 pm or if they worked the hours at home or at the
office or took off Thursday and worked Saturday of the same week.
·
Employers will turn full-time employees into
part-timers. Employers who
want to save money by only hiring part-timers don’t need the incentive of
time-and-a-half to do so. As discussed above, while employers may hire more
people to work straight time, cutting hours back below 40 (as opposed to
exactly 40) won’t reduce the cost of the new regulation.
The rationales for
paying people extra money for overtime are simple:
1. The extra time puts a burden on meeting
other, i.e., family, responsibilities and enjoying an outside life.
2. It’s harder on the mind and body to work long
hours, and employees should therefore get additional compensation.
I have asked
employees to work very few overtime hours over the 27 years I have owned an
advertising and public relations agency, because I believe that work
performance degrades after eight hours a day and 40 hours a week and I also
believe that people are better employees when they have a full and active
personal life than when they dedicate themselves solely to the job. There have
been times when the temporary demands of the job have forced people to work extra
hours. We have often given comp time to those working overtime, something that
the new regulation does not allow for employees making less than $47,476. Thus,
my costs will go up a little bit, which means my profit margin will decline
slightly. I’m not too worried about it, and I’m happy to pay time-and-a-half
instead of straight time (which you pay whether directly or through comp time)
for the occasional overtime hour of lower-paid employees. I know I’m still
making additional profit from the overtime, since the same office,
administrative and healthcare costs are being spread over more hours. Those
(immoral) companies that have built extra profitability into the system by
making employees regularly work overtime for nothing or straight time may have
a greater challenge.
I’m disturbed by the
number of legal
scams that the Wall Street Journal
and other media are reporting that employers have already devised to avoid
paying time-and-a-half or any overtime pay. Some companies say they will reduce
the base rate of employees who routinely work overtime, meaning that for the
employees to maintain their current income they will always have to work the
extra hours. Other employers or industry representatives say they will raise
the salaries of employees to over the threshold above which they don’t have to
pay overtime and reduce bonuses to compensate. Let’s hope the Department of
Labor adjusts their regulations accordingly and go after these scofflaws.
Let’s face it. One
of the two major reasons that the wealthy—meaning business owners, executives
and highly-paid specialists—have taken virtually all of the additional wealth
and income over the past 36 years is that salaries for all but the very top
wage-earners have stagnated until quite recently. The other reason, BTW, is
that the government has taxed the wealthy less and provided fewer services to
the poor and middle class. Like increasing the minimum wage, mandating overtime
pay for more employees and setting it at one-and-a-half times base hourly wages
goes a little way to restoring wealth equity.
No comments:
Post a Comment