Overtime Rule is One Thing, Enforcement is Another

iStock_000015098858MediumSan Jose   It’s official now. Starting December 1st, a bit more than six months from now, salaried employees making less than about $47,000 per year or $913 a week will be eligible for overtime pay at time-and-one-half of their effective hourly rate. The last adjustment in 2004 was a bit over $23,000 or $455 per week. Importantly, embedded in the rule is a regular adjustment every three years, so in 2020 the Department of Labor estimates that overtime eligibility will be $51,000. Earlier estimates targeted the impact as potentially effecting more than 5 million workers. Restaurant and other trade associations have indicated continued opposition, but no matter the sound and fury, the impact of this new rule will be huge one way or another.

At the least the new rule mandates a much closer accounting of hours for workers that have been salaried in the range of an effective rate of between $12 per hour and $23 per hour, which will require an obvious adjustment for many employers. The reckoning will not just come in the area of the standard workweek. Any regular meetings, conventions, seminars, and other work-related events that had been automatic for salaried workers in that range will now potentially trigger overtime. And, if not, overtime adjustments in workers’ schedules or exclusion from such events. Travel time has always been a contentious issue for hourly workers, and we can expect a deluge of transitional controversies for such workers now.

Increases before 2004 were more minimal, allowing employers to potentially meet the overtime requirements by raising minimum salaries above the threshold, giving workers a nice raise and avoiding the problems. We can expect that a doubling of the rate will not be met by most employers with an across the board raise of ten or fifteen thousand a year, but some who are close might bump workers over.

Opponents insist that this will mean reduced hours for many salaried workers, and that sounds right, but that’s also fair. Reduced hours for salaried workers does not mean less income than they are receiving now, but at least it means less work for the same amount of money. Workers given fewer hours will either have more leisure or more opportunity to do other work rather than being tied to more hours at the same pay with their primary employer.

My bet though is that this transition will be hard and that the Department of Labor will be swamped with both questions from workers, newly eligible for overtime, and with complaints from many workers whose employers are hoping they can wink-and-nod rather than tightening hours or paying overtime. In city after city where minimum wage increases have been won, we have all found that often the key to whether or not workers actually benefit from the changes is whether or not there is real provision for enforcement. Enforcement means rules with teeth and personnel. There’s no indication that Congress has suddenly beefed up the Wage and Hours Division of the Department of Labor, and they are already lagging in enforcing the existing minimum wage and overtime rules.

For workers to get the benefits claimed by this new rule and actually see increases in real income, it will take a change in employer mindset and enforcement to make sure that employer hearts and minds are forced to change. That change will be harder to realize than the process of simply establishing a new rule. Until then the jury is out on whether or not real wages will increase for salaried workers at the level projected.


Techies are Turning White Collars Dark Blue

Amazon warehouse

Amazon warehouse

New Orleans    The first shots are being fired in a workplace battleground where workers have been living the myth that their status was protected and their bosses were their protectors. Modern technology, tech companies, and perhaps even the government are on the verge of completing the process of turning white collar workers into blue collar wage slaves and observers are taking note of the war, even as it may have already been lost.

Driving to work, I heard a radio disc jockey express so much horror about what he was hearing and reading about workplace practices for white collar workers at Amazon that he was claiming reservations about continuing to shop there. More Amazon workers were parsing the problem of workers breaking down in the intense competition in tears at their desk cubicles with the number weeping in the women’s bathrooms, which must define a distinction without a difference. Cartoonists at newspapers are having a field day on Amazon. Jeff Bezos, the billionaire owner of Amazon took his hand off the whip for a minute, after refusing to be interviewed, and wrote a note to his 180,000 workers and said he didn’t “recognize” the “Amazon where he works” with the cries of current and former white collar worker abuse. He suggested they email him personally if they felt under the gun, which is about as likely as hell freezing over.

Blue collar workers have endured more than a century of tight time management by the clock and by the task, usually with a supervisor hovering over them. Now it’s coming to white collar workers, and there won’t be happiness in corporate land.

Part of this is attributed to new technology devices and applications that allow white collars to be as tightly tracked as blue collars have long been. At the simplest level workers are having to punch in on their smartphones and computers, but at the most sophisticated level their computers and devices have an extra set of eyes nudging, clocking, and monitoring them constantly. In many situations, white collar workers are being converted into drones managed by joy stick jockeys miles away in Silicon Valley, Seattle, Bentonville, and beyond.

As more white-collar tasks have also been globalized and made redundant, and tech has become wildly competitive, bosses are naturally going to want to make sure that their mid-managers and white collar workers are as productive as their blue collar workers. General Electric is moving real time evaluations for white collar workers on smartphones. Apps and companies called Workday, Timesheets, BetterWorks, and Anytime Feedback have institutionalized Big Brother in the workplace. In fact the founder of Timesheets.com was quoted in the Times saying, “We tell people not to focus on the Big Brother aspect. This is all efficiency.” Wow, buddy, is there a pill for that to go with the app?

A majority of salaried workers are saying that they work over 50 hours per week. New DOL rules that have been proposed would make workers paid less than $50,000 per year eligible for overtime. Undoubtedly, in coming months micromanagement of white collars will accelerate in anticipation of the new regulations and clearer penalties. Bosses will say the government requires tighter time records now for such workers, and they will feel even more righteous about getting every minute of work they can get squeeze out of these white collars.

Millions are going to be singing the blue collar blues soon. Some may even start to understand why unions are important and wish those kind of things were knocking on their doors these days.