Obama to force businesses to pay more employees overtime

posted at 5:21 pm on March 12, 2014 by Allahpundit

Unlike his various “fixes” for ObamaCare, there actually is some statutory basis for this move. In both cases, though, he’s following the same rule: Even if the policy isn’t good, the politics are, and that makes it worth doing.

It’s a logical corollary to his push to raise the minimum wage. If, in the name of fairness and income equality, we can tell businesses how much to pay their lowest-ranking employees, we should also tell them how much to pay their middle managers, no?

Under current federal regulations, workers who are deemed executive, administrative or professional employees can be denied overtime pay under a so-called white-collar exemption.

Under the new rules that Mr. Obama is seeking, fewer salaried employees could be blocked from receiving overtime, a move that would potentially shift billions of dollars’ worth of corporate income into the pockets of workers…

In addition, Mr. Obama will try to change rules that allow employers to define which workers are exempt from receiving overtime based on the kind of work they perform. Under current rules, if an employer declares that an employee’s primary responsibility is executive, such as overseeing a cleanup crew, then that worker can be exempted from overtime.

Currently management can avoid paying you overtime if your duties are “executive” (i.e. supervisory) and if you make more than $455 per week. O wants to raise that salary cut-off so that lower-ranking “executives” get time and a half just like the people they’re supervising. New dilemma for businesses, then: Do they bite the bullet and pay extra to middle managers who work overtime? Or, in the name of keeping costs down, do they decide to be sticklers about hours?

First of all, nobody is guaranteed a pay increase as a result. Back when I was briefly in the Newspaper Guild, an older employee explained his real view of the utility of overtime laws: They force managers to schedule more carefully, to avoid cost overruns. As a relatively highly paid young reporter with zero control over my schedule, that made sense.

But that also means non-exempt employees will be watched more closely to avoid tripping the sort of litigation threat that increasing numbers of labor lawyers are looking out for. Working at home could become taboo, since the employer has more difficulty monitoring hours and working conditions. Employees who harbor the perhaps foolish idea that by working hard and taking on greater responsibilities they can move up in the organization will instead be told to go home and relax.

Less work — except for labor lawyers, who’ll be litigating these new regs to the last dotted “i”. Actually, “less work” is a nifty summary of Obamanomics to date: On top of massive long-term unemployment that’s persisted throughout our “recovery,” Obama’s minimum-wage hike would cut 500,000 people from the work force and his pet health-care law would encourage another 2.5 million to shake off the shackles of “job-lock” and ease themselves out the door. Hopefully Jared Bernstein’s right that there’ll actually be extra hiring because of this move as managers look to avoid overtime costs for one “executive” by bringing more “executives” onboard to fill out shifts. But then that assumes that there’ll be no offsetting cost-cutting, including payroll, as the new hires are brought on.

Like I said, though, good politics. Nothing’s going to save Democrats in November but maybe the extra income for some middle managers will soften the blow at the polls. And it pays for O to do something splashy occasionally to polish the Dem brand as the party of the middle class. Republicans with megaphones like Mike Lee and Rubio are looking to make inroads with blue-collar voters. The guy with the bully pulpit can do more to bigfoot them than anyone else.

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Bmore on March 12, 2014 at 9:11 PM

@astonerii: tech firms for creative/front office positions work on this basis. get your stuff done, they don’t care what time you show up or leave.

uatu1878 on March 12, 2014 at 10:03 PM

The problem is, we have a LOT of labor laws – too many in my view, and every step they take in this direction makes the US less competitive in the world market. Libs keep pushing these kinds of changes to the labor laws and then cry about all the companies moving their jobs and money overseas – and never seem to figure out how those things are related.
I’m ok with some basic labor laws about how employees must be treated, but beyond that, things like minimum wage should not exist. In a free labor market, if you don’t like your pay or working conditions – go find a different job. Companies that mistreat their employees or don’t pay enough will not be able to get or keep good employees, and they will eventually lose out.

dentarthurdent on March 12, 2014 at 6:36 PM

I don’t think I buy the argument that companies won’t be able to keep employees or they will find jobs elsewhere. Ideally in a free market they would have the options, but a lot of regulation prevents true competition. Certain industries all have the same practice so it doesn’t matter if you switch to another company.

After reading the NYT article again I don’t think this is quite the approach I would take, but it is in the same ballpark. I’d much rather they just get rid of the exempt laws and let employees negotiate how they want their contracts. This way you could actually see some market dynamics at work and minimum wage laws would still apply on an hourly basis.

ArkyDore on March 12, 2014 at 10:44 PM


Bmore on March 12, 2014 at 9:11 PM

Please pardon my ignorance if is the case, but kindly share the shorthand of your repeated responses; else, are you bereft of meaningful words and thoughtful sentences to convey same.

KissMyAmericanFlag on March 13, 2014 at 12:46 AM

All this will do is push more companies off-shore. This is a job killer.

Zomcon JEM on March 13, 2014 at 7:31 AM

This makes perfect sense, if you understand Obama’s worldview. (Which is completely mistaken, but even crazy people tend to be logical and consistent within their own crazy view of the world.)


There is only so much work to do in the country. Companies aren’t hiring new workers because they have current workers they can pressure to work longer hours without costing them more, unlike new workers. Therefore, you force the companies to pay those workers overtime, it becomes more expensive to ask them to pick up the slack and they will hire more workers they can use at normal time, instead of time and a half.


It is, of course, crazy, because it just makes doing business more expensive. In the current environment, it is more likely that businesses will cut back on everything, rather than increasing hiring. Obama doesn’t believe that. He thinks “profits” are something unfair and businesses will FINALLY be forced to give up some of those ill-gotten gains.

He doesn’t believe that profit is necessary for a business to survive. He thinks a business should “fair” and just break even.

This will, of course, lead to the business failing, because whoever is running it is doing it for free.

makattak on March 13, 2014 at 9:38 AM

Comment pages: 1 2