On March 17, 2016, in a move that seems in tune with the current political climate, Republican lawmakers in the U.S. Congress introduced legislation to block implementation of the U.S. Department of Labor’s (DOL’s) proposed FLSA “white collar” overtime exemption rules. On Dec 1,2016 as the FLSA is currently written the minimum salary an employee must be paid to be exempt from overtime is $455 per week or $23,660 per year. Obama himself via Executive Order, the Dept Of Labor’s rule changes, employees must earn $9 per week or $47,476 per year to be exempt from overtime, putting these workers in the 40% percentile of weekly earnings for full-time salaried workers. The minimum salary for “highly compensated” employees would also increase, from $100,000 to $122,148. For the first time ever, these salary thresholds would be adjusted automatically for inflation. (BTW this move is just another lawless intrusion by the Executive branch, and it is against the law because presidents don’t write and pass laws, the Congress and Senate do)
In theory this sounds good but as a small business owner in practice it’s a a disaster. Why? Salaried workers living in rural Alabama, Kentucky or Oklahoma where the cost of living is low will automatically be making more than double their salaries. An example is going from $23,660 to $47,476 overnight. People working in research and development usually work flex hours. The laws as they stand now accommodate creative types or stay at home moms who work flexible hours, Commissioned sales employees , Computer professionals, Executive, administrative, professional and outside sales employees
This will change if Obama has his way.
For example: Consider Rob, an analyst at a consulting firm, who earns a salary of $45,000 a year. Now if he works late one night he can come in later the following day, or take extra time off. He can duck out of the office to attend his child’s kindergarten concert. He can come home for dinner and catch up with his work in the evenings. With the Labor Department’s new overtime rule, effective December 1, this will change. Along with others who make under $47,476 annually, Rob will have to keep track of his hours by clocking in and out. Because of the need to track hours, telecommuting will be difficult. If he works longer one week then his employer will not be legally allowed to give him “comp time” (time off instead of the extra hours), but will have to pay him overtime instead. Not that Rob will necessarily earn more than what he is making now. Either Rob’s employer will make sure he never works more than 40 hours in a week, or his rate of base pay will be lowered to make up for the extra hours worked. The Labor Department’s new salary test means only that Rob is “protected” with the right to time-and-a-half pay rate for any hours worked over 40 per week, but he never works over 40 hours, it is an empty benefit. Most workers affected never get the chance to work over 40 hours per week. The administration estimates that about 4.2 million workers would qualify for overtime in 2017.
The American Council on Education immediately criticized the new rules. Regarding Teachers and Professors “The new rule will turn many lower-level, salaried employees into hourly workers who are eligible for overtime pay. But requiring such a dramatic and costly change to be implemented so quickly will leave many colleges with no choice but to respond to this regulation with a combination of tuition increases, service reductions and, possibly, layoffs,” said a statement by Molly Corbett Broad, president of the council. A lawsuit filed Tuesday by Nevada Attorney General Adam Laxalt and joined by 20 other states challenges the legality of new overtime rules implemented by the Obama administration and set to take effect Dec. 1. The suit, filed in the Eastern District of Texas, argues the rule implemented by the Department Labor is unconstitutional because it dictates wages states must pay employees for government functions and exceeds congressional authority. Randi Thompson, state director of the National Federation of Independent Businesses, said the changes amount to “cruel and unusual punishment” when small businesses are “gearing up for the make-or-break holiday season.” Kristin McMillan, president of the Las Vegas Chamber of Commerce, said many employers will be unable to meet the mandates and will be forced to curtail hiring or lay off workers. Other states that joined in the suit are Alabama, Arizona, Arkansas, Georgia, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Mississippi, Nebraska, New Mexico, Ohio, Oklahoma, South Carolina, Texas, Utah and Wisconsin.
This is no different than the “fight for $15.00” attack. The staged protests of McDonald’s is a good example. McDonald’s is a franchise. Each franchise is owned by a different owner. The “Fight for $15.00” Min. wage constantly protests are always in front of McDonald’s. The idea is –attack the brand. If they win that fight by putting enough pressure on the brand then they will soon extort other franchisee brands until everyone is making $15.00 min wage. You can forget about those $1.00 burgers, and of course entry level positions will be a thing of the past. No one will hire someone without experience.
The goal is to turn all workers into union workers. You might think that is a big leap but consider this; in the 1980’s 1 out of 3 workers were Union workers. Today it’s 1 out of 10 belong to a union. Driven by the Restaurant Industry the SEIU Union charges $50 to $100 to each union employee. Imagine the windfall unions would get with more workers paying union fees. This whole thing is not about putting more money in peoples pockets; it’s about creating an environment where unions are easy to implement. Democrats and progressives are all in because union workers traditionally vote for the Democrat party.
There is a lot at stake right now. People have no idea how this administration and this president has been quietly working behind the scenes to take away the right of small business. Right to work laws could be eliminated, then good luck firing a bad employee. Customer service will be greatly affected. If these rules go into place without a fight we will all experience Post Office style customer service. Don’t you hate it that bad teachers can’t be fired? Imagine if all employees couldn’t be fired. Thats whazt you have to look forward to. If youre a business you should call your representative right now. If you are an employee you should know this will effect you negatively in the ways I just mentioned. Bad service and bad employees serving you who cant be fired by their employers will be the people you do business on a day to day basis. Life will be miserable.
Call to ACTION: https://www.congress.gov/ find your representative and send him an email or call his office and tell him or her to vote in favor of the following bills HR 4773 and HR 3222
Republicans in the House need to support HR 4773: Protecting Workplace Advancement and Opportunity Act
This bill declares that the proposed or the final rule of the Department of Labor entitled “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees” shall cease to have any force or effect. The rule revises the “white collar” exemption of executive, administrative, professional, outside sales, and computer employees from minimum wage and maximum hour, or overtime, requirements of the Fair Labor Standards Act of 1938 (FLSA).
If the proposed rule is a final rule on the date of enactment of this bill:
- Labor shall not enforce it based on conduct occurring before that enactment date,
- an employee shall not have any right of action against an employer for the employer’s failure to comply with the final rule at any time before that enactment date,
- any regulations that were amended by the final rule shall be restored and revived as if the final rule had never taken effect, and
- nothing in this bill shall be construed to create a right of action for an employer against an employee for the recouping of any payments made to the employee before the enactment of this bill that were in compliance with that final rule.
Labor may promulgate any substantially similar rule only if it has completed certain required actions; but the rule shall not contain any automatic updates to the salary threshold for purposes of exemptions to minimum wage and maximum hour requirements under the FLSA.
The requirement that definitions applicable for such exemptions be defined and delimited from time to time by Labor regulations shall be construed to:
- require Labor to issue a new rule through notice and comment rule making for each change in any salary threshold it has proposed; and
- exclude any rule that would result in changes to any salary threshold for multiple time periods, including through any automatic updating procedure.
Labor may not promulgate any final rule that includes any revision to duties tests for exemption from minimum wage and maximum hours requirements unless specific regulatory text for the provision was proposed in the proposed rule.
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