Leave rules on overtime alone
It’s difficult to respond to speculation. And that is all President Obama has given us on his plan to expand overtime. He hasn’t set a dollar threshold, said what changes there might be to job duties, or offered details on how employers would distinguish between white- and blue-collar workers.
What we do know is that he wants a major change in overtime rules that would force employers to scramble yet again to comply with federal regulations and take on costly administrative burdens that would distract from efforts to create jobs during our nation’s stillstruggling economic recovery. And it would come in addition to workplace changes and new labor costs driven by the Affordable Care Act that are already hampering job growth.
If this proposal seems like déjà vu, it should. Just 10 years ago, the Labor Department conducted a sweeping overhaul of overtime. At the time, it was desperately needed. The wage level that triggers the whitecollar exemption from overtime requirements hadn’t been updated since 1975, and job descriptions of what constituted a manager or professional hadn’t been updated since 1954. The lack of clarity was a bonanza for trial lawyers, and businesses and workers were asking for an update.
Today, there is no desperate need. Employers across every sector of the economy went to great lengths 10 years ago to completely reevaluate their workforces and job classifications. Millions of workers are happy because they gained overtime, and businesses are happy because they finally have clear guidelines and are avoiding lawsuits. Overtime is settled law and is working.
Would workers benefit? On top of higher health care costs and Obama’s proposal to raise the minimum wage, there’s little room to further increase payroll expenses. Broader overtime would likely result in stagnation of base wages. And some workers could miss out on promotions if it means a pay raise plus overtime.
What we need are policies that promote economic growth, job creation and better pay, not more government mandates. Washington needs to stop working overtime on mandates and start working overtime on putting people back to work instead.