New Overtime Rule is a Huge Boost for the Fight for $15

New Orleans        The Department of Labor has formalized a new rule on overtime that will go into effect on January 1, 2020.  Any salaried workers making less than $35,308 annually, will be automatically eligible for overtime.  The standard in effect for the last fifteen years, since 2004, set the bright line for mandatory overtime at under $23,660 per year or $455 per week.  The new standard is a 50% increase to $679 per week.

There was some disappointment in some quarters that the final rule is less than the Obama DOL proposal that would have paid workers making under $47,000 overtime, roughly doubling the former standard, but the Trump DOL still estimates that this will allow 1.3 million additional workers to be eligible for overtime, which isn’t nothing.  Perhaps it is time to take the lemons and make lemonade by looking at the impact this change may drive in wages for lower waged hourly workers?

The existing overtime requirement, calculated for fulltime annual employment at 2080 hours per year, meant that workers making less than the equivalent of $11.38 per hour were eligible automatically for overtime, but not so much if they were over that level, salaried, and could establish discretion in job performance.  The Obama proposal equivalent would have paid overtime under $22.60 per hour, more than three times the federal minimum wage of $7.25, and predictably an overreach that brought employers, large and small, out of the woodwork to oppose such a leap.  The new standard figured at fulltime hours is equal to $16.98, meaning essentially that a salaried worker would have to be paid roughly the equivalent of more than $17.00 per hour.

Now, $17 an hour is a very interesting number for both living wage campaigners and businesses near that level who want to protect themselves from potential overtime claims.  I couldn’t find a DOL estimate of any multiplier effect from this new overtime rule, and given the Republican regime, and its putative claim to still be seen as the party of small-town businesses rather than the Wall Street superrich, they may not have been willing to offer one.  Nonetheless, there is a multiplier in reality, whether in fast food, small shops, or even nonprofits, who are unwilling to take a chance, so will raise the pay of lower level and front-line supervisors over the $35,300 and $17/hour standard wanting to be safe rather than sorry against future disgruntled employee claims.  Maybe it’s another million workers?

Once this $17 per hour seeps in, it also should finally give a huge boost to the claim of reasonableness for those still fighting for $15 per hour.  Sure, it is more, but only a couple of thousand more, so not from another planet, making paying $15, and meaning it, easier for employers to swallow. Furthermore, this overtime rule is national, effecting red and blue states, the South as well as the West, equally.  That’s a line that the Fight for $15 has largely not been able to cross in a lot of the country that lacks local option rules or the ability to bring wages forward through initiative and referendum procedures.

This won’t win the fight, but it sure might give it a boost as the new rule sinks into paychecks in 2020.

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Defining Overtime and Discretionary or Supervisory Workers

working_overtimeToronto   President Obama and his administration have announced an “always-on-the-shelf,” but long overdue move to revise the rules on definition and pay limits defining supervisory and discretionary workers and their eligibility for overtime.  In a sobering commentary noting the slow, grinding wheels of government, some have noted that a rule making procedure along these lines within the Department of Labor could take two-and-a-half years to complete, running virtually up to the end of the President’s term. 

Yikes!   Their solution was simply to strong-arm a benchmark wage number like $1000 per week as the bright line test for overtime.  In their view anyone making under $52000 per year would automatically make overtime.  Anyone over $52000 would not.  The attraction for these advocates is that 5 million workers would get a raise, and, yes, that’s good news indeed.

Unfortunately, what New York and Washington, D. C. commentators fail to reckon with in their 1% world is the fact that $52000 is huge, big time money in most of the country and for most workplaces.   The median income of Pennsylvania is $52000.  54,000,000 people in the US on the 2010 Census Bureau reckoning live on $50000 or less per household.  That’s 47%, almost half, of all US households!   In whole companies we are going to hear true stories about the fact that no one from the lowliest worker to the top boss and owner makes, $52000 per year.  Would that mean everyone would be entitled to overtime or that no one anywhere in the entire company is a supervisor or discretionary employer?

We had better be careful of making a needed proposal for an adjustment on overtime not seem so pie-in-the-sky and out of touch with workers and working America that it looks like nothing more than rhetoric, and certainly not a realistic policy proposition.  The current financial definition of $477 per week is woefully out dated and few would disagree, even among conservatives, that that number is a obviously a poor threshold for the exclusion, but trying to wave a magic wand and more than double the figure is going to throw the baby out with the bathwater. 

I’m not sure there’s an easy way to do the work.  Arguing, as some are, that we need to not worry about the definition of supervisory and discretionary work but just clamp a wage number on the problem is also fraught with difficulty and could tie any increase up in the courts for way more than a couple of years.  There’s justice to our cause, but it’s hard to see a shortcut that doesn’t involve heartache and mayhem. 

I’m afraid it’s roll up the sleeves time, if we’re going to change the definition of overtime, anytime soon.

Postscript…

            As the station manager of KABF/FM, 88.3, broadcasting 100,000 watts of power from Little Rock, Arkansas as the “voice of the people” in this our 30th year of operation, I’m sent mp3’s by groups, big and small every day, and never know what to do with this part of the job and the dreams of these hardworking musicians.  So, we’re going to start giving readers of the Chief Organizer Reports a bonus as well and include an MP3.  Let us know if you like any of them, and we’ll put them on the air.  Enjoy! 

            Today’s is from the Kings of Leon, called…..

Wait for Me           

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