Opinion Columns & Blogs

New US overtime rule returns balance to pay

Nobody likes the government to tell them what to do. And those who own or run businesses take offense when anything is required of them that they believe will have a negative impact on their bottom lines.

So the gnashing of teeth has already started with President Barack Obama’s announcement that up to 5 million more people will become eligible for overtime pay.

Some businesses have no one to blame but themselves. For years they have dubbed employees as “managers” and then required 50- and 60-plus-hour workweeks. When the salaries of these managers were calculated by the hour, they often were making less than the employees they supposedly supervised.

If the managers didn’t like it, the businesses would warn them not to let the door hit them on their way to the unemployment office.

Not all businesses have taken unfair advantage of the current situation. Many have paid a fair wage for a fair day’s work.

But when abuses become widespread — and 5 million people isn’t a small number — it is appropriate for the government to get involved.

This plan, which does not need congressional approval but which will have to go through a public comment period, would expand the number of people eligible for overtime from about 8 percent of the salaried workforce to about 40 percent, according to the Department of Labor. In 1975, overtime rules covered 65 percent of these workers.

Currently, these salaried workers are exempt from overtime if they earn $455 or more a week or $23,660 per year. The federal poverty level for a family of four in 2015, according to the Department of Health and Human Services, is $24,250.

You can already hear the wailing about the “socialist agenda to redistribute wealth.”

This isn’t a welfare program. These “managers” are working, paying taxes, raising families and often suffering because of the long hours.

Raising the salary threshold to avoid paying overtime from $23,660 per year to $50,440 is a huge increase. However, it is what these managers would have been making had their salary kept pace with inflation since 1975.

During this month in which we celebrate our independence, you call almost hear a modern-day Patrick Henry proclaim: “Give me overtime or give me a 40-hour week.”

Not all managers making low wages for high hours will get a raise. But, at the least, they will have to work fewer hours. This might create opportunities for adding full-time or part-time jobs.

All is not lost for business owners, however. They should take heart from the example of Henry Ford, hardly a flaming liberal, who decided to pay his workers more than the going rate. When asked why, he said he wanted them to earn enough money to be able to buy his cars.

It is simple economics. Better-paid workers have more money to spend to support other businesses. Call it the trickle-up theory. This actually could be a boon to business.