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New federal rule extends overtime to millions of workers

  • ASSOCIATED PRESS

    More than 4 million more U.S. workers will become eligible for overtime pay under new rules issued by the Obama administration.

COLUMBUS, Ohio » More than 4 million U.S. workers will become newly eligible for overtime pay under rules issued today by the Obama administration.

The policy changes are intended to counter an erosion in overtime protections, which date from the 1930s and require employers to pay 1 ½ times a worker’s regular salary for any work past 40 hours a week.

Vice President Joe Biden announced the changes at Jeni’s Splendid Ice Creams in Columbus, Ohio.

In the fast food and retail industries in particular, many employees are deemed “managers,” work long hours, but are barely paid more than the people they supervise.

Under the new rules, first released in draft form last summer, the annual salary threshold at which companies can deny overtime pay will be doubled from $23,660 to nearly $47,500.

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  • It can almost be guaranteed that this action will result in hurting the very people they intended to help. How so? Politicians are serious economic idiots.

    • Would you please explain what you feel will hurt including what you believe the estimated economic impact to both workers and businesses will be?

        • In what sense? Are you saying that I didn’t back my opinion that SA comments fail to offer analysis or evidence to back themselves up? Do I really need to offer any more evidence than to direct you to this page that you are reading? I’m not sure how much more elementary this could be. Was this even a point worth trying to debate with me? Hilarious.

        • I wouldn’t waste time debating with someone who can’t see the obvious, that employers will react to this new imperial edict in ways that will hurt employees. Their least likely reaction is to simply pay more in labor costs. Their most likely reactions will be to reduce base salaries, limit hours by hiring more part time people, reducing the number of employees, investing capital (automation) to control labor costs, or, for weaker/smaller businesses, going bankrupt, failing and providing a salary of zero.

          All of this fundamental stuff is just too, too tricky for some, maybe many, that think that money, business capital, just grows on trees.

      • Pretty obvious that sharply driving up labor cost will hurt business competitiveness, here and globally. Since there is no magic pot of money, except in Obama land, jobs will be cut.

        • That’s the same argument that people tried to make to stop minimum wage laws from being enacted in 1938 under the Fair Labor Standards Act. Guess what? That was a year before the Great Depression ended in 1939. Economic growth since then has been tremendous, and the sky still hasn’t fallen. Do you have any better points, or is it just going to be same tired old argument of “but labor costs!”?

        • If workers are provided with more money, then wouldn’t they spend more money? Yes, arguably the middle class does not spend, but assuming they invest in mutual funds or stocks, doesn’t that provide more capital for businesses to expand? It’s not like the money, that is the salary gets thrown away.

        • Sorry, I forgot to mention that if you make the small salary of $50,000 you can’t get OT…so were talking about small group of very low level management people here. The rules haven’t changed for regular hourly employees.

        • Richard: Read repeated studies on impact of large minimum wage hikes. Note that our labor participation rate is the lowest in nearly 50 years. Comprehend that, since 2008, we’ve had sub-three percent economic growth. Appreciate the fact that we’ve had a zero interest rate policy in effect for years and none of the above has improved substantially. Note that thinking economic historians agree that FDR’s (and Hoover’s) attempts to artificially prop up worker pay probably extended the great depression by nearly a decade. And finally, ponder the sanity of driving up labor cost with overtime and large minimum wage hikes in a stagnant economic environment.

          Advertiser: What would you call that? Trickle up economics. I have no argument against higher pay, but why wouldn’t saving more or paying down debt be an option as well? Number of employees affected is around 4 million, but what does it matter to those whose hours will be cut or jobs simply lost to business failures/management changes?

        • Ok, the trickle up was a good one.

          I’m really not for higher or lower wages. My thought is that this is really a smoke screen, sounds good for the lower income salaried employees, but really doesn’t do much for them.

          If your number is correct, 4 million affected, according to the dept of labor there are 151 million currently employed, that means, less than 2% of the workforce is affected. So, the percentage is low, and really, of the total paid to those employees, what is the change per employee? Or per business affected? And quite frankly, it’s a pretty low wage to begin with, so a small change really doesn’t tip the scales for many. Of course, companies like McDonalds or Walmart may take a larger hit.

  • I don’t like what government is doing.The employee either takes the job or not with the knowledge of the pay package. The Government needs to stay out of legitimate businesses who conform to all standards dictated to them. Thats why we have Unions!

  • Sounds fair. Seems like upper management only cares about their bottom line and couldn’t care less about the managers busting their behinds and making way less per hour than the people they are managing. In the long run this will probably help them retain their best managers, so it is a win-win situation all around. Training new managers all the time costs more money in productivity than keeping your best workers.

  • Liberals taking over before Obama leaves office. This President is bisier in his last year than in his 1st term?? A socialist agenda being perpetrated on the American economy? We will be no different than Greece, Italy, the Iberian Peninsula and Scandinavians, simply Europe, excluding the Brits.

    • What exactly does “Liberals taking over before Obama leaves office,” mean? And while the countries you have cited are currently in an economic downturn, can you please tell us what the similarities between say Greece and the US will be, maybe more specifically related to this issue? How is changing some salaried workers to hourly socialist?

      • But, but… Reaganomics! That wealth is going to trickle down any second if we just let the free market run its natural course in an anarchic vacuum. After all, we all know how well anarchy works. The government never needs to step in for anything ever for any reason whatsoever at all. This is true because Fox News told me so.

        • Thank God for Fox News the number one rated cable news network. Don’t you just love it when these folks state their position but just can’t resist bad mouthing FOX NEWS.

  • This is what we get when we elect a community organizer, someone who has never run a business, as president. If he and his ultra-liberal advisors have their way, we’re going to end up with 30 hour work weeks and three months of vacation. And people wonder why so many jobs are being moved to foreign countries. This president is more interested in legislating social change than he is in keeping the country safe and our economy strong. He will eventually be viewed as one of our worse presidents ever.

    • I guess practicing law for a decade means you have no business experience, right? So, pretty much every lawmaker in the country falls into the same category as him, right? And, sorry, but how does a 30 hour work week translate into jobs being moved overseas? And quite frankly what jobs are you talking about, low level manufacturing?

      • In Obama’s case, he’s right. Obama has no business experience. His legal experience was very limited, only 4 years and limited to involvement in 30 cases.

        A thirty hour work week would drastically increase business costs and reduce national economic productivity. American companies would become less competitive globally, just like what has happened in France which is now in the process of trying to extract itself from the mess created by socialist overregulation of jobs and over taxation of entrepreneurs.

        • Actually, I think he was Of Counsel for a few years as well, so basically, that is doing his own thing. That is, his own business.

          And what about Reagan? What business experience did he have…oh yeah, for a short time he was President of a Union.

          You are just assuming that businesses couldn’t do something like pay a lower hourly wage, which in turn, although having to OT, still keeps employment costs basically the same. So, the argument is really not the cost to the business, but really does it hurt the American worker because now he has to work more for the same amount of money.

      • Come on! “practicing law” is NOT the same as running a business. And, if U.S. people only want to work 30 work weeks, companies will go overseas to find people who will work 40 hour work weeks because labor costs are a huge factor today for a profitable business. Businesses have already moved overseas because of lower labor costs (i.e. salaries). This is all COMMON SENSE.

        • Yes, practicing law, medicine, accountancy, engineering are all businesses. I’m a partner at a professional services firm, and yes it very much is a business.

          We are talking about salaried employees here, are you going to go overseas to fill your management positions? I think not. There is a difference between blue and white collar work.

        • Oh, and not to mention, it’s the threshold being increased. So if you make $50,000 a year, you are not eligible for the program.

      • Well, our economy is the least bad in spite of Obama, not because of him. He is the first president since the 1950s to not have a single year of economic growth at or above 3%. In spite of his claims otherwise, since 2008 we’ve had the slowest recovery from recession since the 1940s.

        • So, what is magic about the 3% mark? And what other president had to deal with an issue similar to the 2008 crash?

        • What’s the magic? Two is 50% less than Three. Less growth, fewer jobs, less competition for labor, lower or stagnating wages, Erosion of the middle class. Growth in government debt because a 2% economy produces far less tax revenue than a 3% economy.

        • Sorry, what I meant was why did you choose 3%, as opposed to 4% or 2%..and how does a slower economy lead to the erosion of the middle class?

  • I was a “manager” at a big box store. I was never allowed to attend a parent-teacher conference, doctor’s appointment, or anything else without using sick or vacation time. The fact is, salaried workers here in Hawaii are held to the requirements of hourly employees when it suits the employer, and are told they are “salaried” when late nights and other extra time is needed.

    • Correct. The lies being perpetrated by the organizations representing big businesses are plain to see. Workers may be allowed time off for those parent/teacher conferences, but you know that they’ll be required to use their own vacation time to do so. This is not a new law. What the President has done is simply raise the level of pay to a more practical level, even though it STILL isn’t consistent with the rise in inflation. It’s a step forward for sure.

    • (One of the great things that the Army did around 2001 or so at Schofield (Hawaii has a lot of military dependents in public schools) was to issue an order to all troops that, during Parent Conference times, a soldier’s duty station is the school. When I was admin at a public school on-base after this order, we had 100% participation in conferences.)

  • I will not be surprised if Obama applies the same rules to our Armed Services before he leaves office. Can you imagine soldiers stopping combat with an enemy force at the end of eight hours unless they get overtime pay?

  • Will this count for teachers too? Salaried, but also chaperones after hours. Proms, field trips, athletic events, clubs………

    • Teachers are paid, albeit small amounts for coaching, field trips happen during school hours…I believe chaperones at events such as the prom are volunteers.

      • (only pertains to contracted coaching. There are small differentials for secondary Music teachers (they work a lot of summer and evenings) grade level/Dept. chairs. Field Trips and even chaperoning are not reimbursed but teachers are expected to participate in class/grade level activities. Registrars, Student Activities Coordinators, some Student Services Coordinators are 12 month employees and receive a differential. (Administrators are expected to find a way to cover all activities except Proj. Grad. which is not school-sponsored.) No compensation for summer/holiday training and workshops except in some relatively rare cases where an honorarium (often approx. $100 for a session) is provided. Things like scoring AP exams are compensated, including travel and per diem by the host organization e.g. College Board/ETS.)

  • You supporters of Bathroom Barry are deranged socialists. Much like minimum wage laws, the effect will be to hurt the workers. Business adjusts to EVERY government regulation. They will adjust to this regulation also, but it will be on the backs of the worker not the “evil” business. The law of economic$ will still “trump” the regulations of “Bathroom Barry obamanomics”!

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