Obama’s overtime rule pads government workers’ wallets

HE Obama years have not been good to the average worker. Sluggish economic growth has gone hand-in-hand with anemic wage increases. So it’s notable that one of the Obama administration’s “solutions” to that economic woe is to force struggling families to give raises to white-collar government employees.

That fact is highlighted in a lawsuit filed by Oklahoma and 20 other states challenging a new federal edict requiring overtime pay for many white-collar jobs.

In March, President Barack Obama ordered the Department of Labor to “revise” the Fair Labor Standards Act’s overtime exemption for white-collar management jobs and salaried positions. Under that 1938 law, employers must pay a minimum wage and pay time-and-a-half when employees work more than 40 hours in a week. Yet the law has always exempted white-collar positions in which a worker is “employed in a bona fide executive, administrative, or professional capacity.”

Obama’s order seeks to effectively eliminate that exemption in many instances without explicit congressional authorization. Under the order, the current threshold for workers to qualify for overtime pay will increase from $23,660 a year to as much as $50,440. Up to 5 million positions may be affected.

Private businesses have warned the rule will lead to curtailment of worker hours and fewer opportunities for worker advancement. But the negative effect also extends to state and local governments.

In their lawsuit, officials from Oklahoma and the other states argue the overtime rule “will increase their employment costs significantly” for salaried executive, administrative or professional employees.

Without an increase in tax revenues, the plaintiffs argue, state and local governments will be forced to “reduce or eliminate some essential government services and functions.”

Officials in Iowa estimate the rule will increase government and university costs by approximately $19.1 million “in the first year.” In Arkansas, the County Quorum Courts of Baxter, Pope, Benton, White and Marion counties have passed resolutions citing the financial hardship they will face as the result of the overtime rule and urged state officials to challenge it in court.

In Kansas, up to 20 percent of employees in the executive and judicial branches of government may qualify for overtime. And so will numerous white-collar college employees. Up to 1,600 salaried state employees in Kentucky will qualify for overtime pay, as will 1,437 state employees in Arizona.

The lawsuit notes the federal Department of Labor “disregarded concerns expressed by local governments” when drafting the rule.

Any increase in salaries for government workers will ultimately be paid by working families through higher taxes, increased fees or loss of services. At the same time, the overtime rule could drive up tuition and fees at colleges. Otherwise, as The Wall Street Journal reported in March, college officials warn the overtime rule could force “cuts in student services, degree offerings and labor-intensive research.”

The Obama administration portrays its overtime edict as a way to help low-paid service workers. In reality, much of the benefit will go to professional and administrative staff, particularly those working jobs in state government and colleges that are worlds removed from fast-food stereotypes.

In short, Obama’s overtime rule will force working families to pay more in taxes, make it harder for those families to afford college for their children, and leave them with fewer opportunities for advancement in the private sector. Obama’s economic policies continue to be shortsighted and counterproductive.