Tough Problems on Overtime for Salaried Workers

Citizen Wealth Financial Justice

Time is moneyNew Orleans               The Department of Labor has overshot its goal of writing new regulations on overtime rules for salaried workers by about six months.  Sometimes the issue is foot dragging, but this time it may be simply the fact that it is a very, very difficult issue to handle.

Keep in mind that hourly workers have a right to overtime without exemption.  The issue here is workers who receive a salary, guaranteeing weekly and annual income.  Some of these workers are exempt because of their discretionary, supervisory, or administrative duties amounting to 27% of the salaried workforce.  The other 73% are the issue, though sometimes the classification of the exempt workers are tough issues as well.  Organizers with wildly flexible work hours and job discretion are among the exempt categories.

The levels were set a long time ago in the 1970’s at a $455 per week salary or $23660 per year, so just the tick-tock of time alone makes a case that an adjustment is bound to be called for at some level.  Studies of census data reviewed by the Economic Policy Institute (EPI) find that 12% of salaried workers are below the $455 per week standard now, compared to 65% that were below that number in 1975 when the current rules evolved.

Where the rubber hits the road is the at the level of the increase and the issue of what is known as “compression” in labor economics and collective bargaining, meaning the impact of other wages in relation to each other.  $23660 might not seem like much, but it’s more than 50% above the annual pay at the current minimum wage which would be $15080, if such a minimum wage worker was fortunate enough to get guaranteed hours, which many do not.

Editorially the New York Times is advocating that overtime should be guaranteed to salaried workers who are making less than $1000 per week.    $52000 might seem like chump change in New York City these days in the unforgiving land of the 1%, but let’s keep in mind the fact that 50% of all workers make less than $28031 per year and almost 75% make less than $52000.  Some of these arguments feel like the tactical problem of imagining how we jump the minimum wage from $7.25 per hour to $15.00.   In many places in the country, such a jump is so unfathomable that it makes the whole campaign seem rhetorical, rather than real.  It has also pretzeled even our victories into long timelines stair stepping to the higher numbers.   $50000 feels like that same kind of “pie-in-the-sky” problem, even though it would move over 50% of salaried workers into the overtime bracket.

EPI found that there are also negative consequences of going too high, too fast, not surprisingly in reducing flexibility of work schedules over $40,000.  We found this in a bargaining unit of Licensed Practical Nurses at a nursing home represented by Local 100 in Shreveport, Louisiana.  The nurses make in the range of $17 per hour and the company wanted to ask them to be “on call” for $50 one day on a weekend of every three month period.  Few are ever called so for most this would have been an easy $200 per year, and the union was glad to ask for more.  The workers though were boiling over the issue, because they just plain did not want to lose the flexibility on even those four days of the year.  That was interesting to me!

Maybe we should settle for a fast jump to the $28000 number and a series of bumps to $35000 or $40000 and a sunset provision that forces reevaluation of the standard in a certain number of years.  It is hard to imagine the appetite for a doubling the wage standard of salaried workers in this political climate.  Most salaried workers are way outside of union protection and representation, and the New York Times is not actually their bargaining representative.  We might want to settle for something real so we have something to show for the struggle before Obama hits his expiration date as well.


Colt Ford – Overworked & Underpaid (Feat. Charlie Daniels)