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U.S. businesses cheer overtime ruling; many already upped pay

  • ASSOCIATED PRESS

    In this June 22 photo, Labor Secretary Thomas Perez speaks at a news conference at the Treasury Department in Washington.

Las Vegas » Businesses around the country cheered a court decision blocking the Obama administration’s sweeping new overtime rules, but many had already raised salaries or ordered managers to stick to a strict 40-hour workweek to avoid costs they expected to incur starting next week.

An injunction issued Tuesday by the federal court in the Eastern District of Texas prevents the Department of Labor from mandating overtime pay for salaried employees who make less than about $47,500 a year — a dramatic jump from the old threshold of $23,660.

More than 4 million workers would have been newly eligible for time-and-a-half pay under the rule, which now faces far more uncertainty from Donald Trump’s incoming administration.

The ruling giving businesses a reprieve “is a little late for a lot of people’s taste,” said Tom Gimbel of Chicago-based LaSalle Network, a staffing firm that advised companies on how to prepare for the new rule. “A lot of companies had already rolled it out.”

Wal-Mart, for example, raised entry-level managers’ starting salaries by $3,500 in September to stay above the threshold. But there were also raises among clerical workers for Opportunity Village in Las Vegas, a nonprofit that teaches vocational skills to people with disabilities and raises its money through private donations and running a thrift store.

Opportunity president Bob Brown said he couldn’t bear to backtrack on the decision.

“It’s put us in a difficult situation — you’re spending money you wouldn’t have been spending,” he said.

In Colorado, some restaurant owners operating on thin margins shifted salaried managers to hourly pay so they could better track their hours and cap them at 40.

“That was demoralizing for managers who felt they were being demoted,” said Sonia Riggs, CEO of the Colorado Restaurant Association.

The Department of Labor last May ordered the changes to give overtime to many more American workers, saying they would “go a long way toward realizing President Obama’s commitment to ensuring every worker is compensated fairly for their hard work.”

Inflation had weakened the U.S. overtime law passed decades ago. Overtime provisions applied to 62 percent of U.S. full-time salaried workers in 1975 but just 7 percent today.

That means some low-level retail and restaurant managers are making $25,000 a year but aren’t eligible for overtime, even when they’re working 60 hours a week.

The court agreed with the rule’s opponents that the labor department overstepped the authority it has from Congress and that the rule could cause irreparable harm if it took effect Dec. 1 as scheduled. The department is now considering its legal options, but Trump will be in charge of the department after taking office on Jan. 20.

Trump told the news website Circa in August that he hoped small businesses would get an exception from the overtime rule, although the issue was not a prominent presidential campaign theme.

The rule’s supporters are now grappling with implications for workers who were expecting more overtime pay just as the holiday shopping rush gets underway.

“This is about the worst news they could get heading into Thanksgiving and the holiday season,” said Vicki Shabo, vice president of the National Partnership for Women & Families, a Washington, D.C.-based group that promotes workplace fairness.

Workers who want to make a good impression on their employers, feel compelled to cover for absent co-workers or are passionate about their jobs often put in far more than 40 hours a week and end up making a sub-minimum wage. Advocacy groups say employees who work for free are giving up time they could be spending with their families or advancing their education to get better paying jobs.

But businesses said the rules would have created an overly restrictive environment that would have penalized younger and slower workers.

“We were going to have to send them home at times,” said Jose Villa, president of the Los Angeles-based ad agency Sensis. “Say, ‘You’re done for the day, you have to go,’ even though we’re working on some important stuff that’s going to be very educational for them.”

With the overtime pay order suspended, Trump’s administration could choose to make its own rule changes through a lengthy administrative process.

The Republican-controlled Congress could change the country’s labor laws, although House Speaker Paul Ryan had decried the overtime plan “an absolute disaster” that Obama rushed through to boost his political legacy.

If the labor department lawyers appeal Tuesday’s ruling, they could end up facing a Supreme Court that includes some Trump appointees.

The injunction takes political pressure off the Trump at a good time, said labor law professor Ruben Garcia of the University Nevada Las Vegas’ Boyd School of Law.

With no new overtime changes kicking in next week, Trump can accept the status quo and does not risk angering workers by revoking the new overtime benefits shortly after employees start receiving them, Garcia said.

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  • Ai ya ya, no kan get overtime pay for junior exec who do not make big bucks like the 1 percent elitist executives? Is’nt funny when the small guy gets shafted.

    • It’s funnier when they voted for trump and find out that he is a pro business guy. THE BUSINESS OWNER not any of the workers, be happy with minimum wage MFers. Your vote did count HA HA HA HA. For all of those blue collar worker he’s anti union too. HA HA HA HA HA

  • In less than a year Trump and his business buddies will privatize Social Security, dismantle the ACA, and cut social, educational and welfare programs, all under the guise of reducing “entitlements.” Additionally, the national debt will soar as taxes on the wealthy and corporations are reduced. Trickle-down economics, a.k.a. Reagonomics and voodoo economics, simply doesn’t work. Since the Republicans will control the executive and legislative branches of the federal government, they will not be able blame anyone else for the mess. The party of no will quickly find that it’s much more difficult to govern than obstruct.

  • I worked for a company that paid a salary to management staff, no OT. But at the end of the tear they received cash bonuse. In their salary were company funded IRAs and such. If they were sick, thefts stayed home with full pay. If you want to move up thats the price you pay!

  • This like a lot of other Obama actions, even though well intended, was poorly thought out. This brief article does little to explain all of the negative impacts of this rule. This is also a good example of an outcome of poor leadership. Because Obama has strong ideals but is a weak leader he couldn’t work to get many of his ideas into law, so he resorted to administrative rule making. He loaded up all of the federal agencies with like-minded liberal zealots who then went way overboard. Now many of this actions have been and will be overturned.

    • IRT AhiPoke, fully agree with your post. Hawaii born President Obama overstepped his authority to create this OT for Federal employees. Not pono. Federal employees have a different employment structure as compared to State and Private.

      • You’re a complete mor0n! This has nothing to do with federal employees. This law applies to employees of non-government jobs. And he didn’t “create” anything. All they did was adjust the threshold for this LONGTIME LAW to bring it up to today’s dollar value. The ign0rance of facts folks like you have is just astounding…

        • HIE is just upset about having to live in a “post-truth” nation.

          It was unsettling when Trump’s campaign manager, Steve “Turn on the Hate” Bannon, was anointed to be his chief White House strategist and senior counselor. Since its start in 2007, Bannon led Briebart News, a vehemently anti-Obama propaganda outlet that has pushed white-supremacist policy positions, as well as conspiracy theories, and racist, sexist and anti-Semitic opinions.

          It was truly creepy to hear Steve Bannon say that he idealizes Satan, the Prince of Lies, and to using the Dark Arts to defeat his enemies. Bannon said this in an interview published Friday:

          “Darkness is good. Dick Cheney. Darth Vader. Satan. That’s power. It only helps us when they (liberals) get it wrong. When they’re blind to who we are and what we’re doing.”

          The senior counselor for the President of the United States pushes hate and models himself on Lucifer and lies. Trump approves of this and says nothing. Fox News says nothing. Breitbart News says nothing.

          Can’t you can see why HEI and so many other Americans are disgusted and upset about our post-truth president?

          See:
          http://www.businessinsider.com/steve-bannon-donald-trump-satan-darth-vader-2016-11

        • “Success is the important thing. Propaganda is not a matter for average minds, but rather a matter for practitioners. It is not supposed to be lovely or theoretically correct. I do not care if I give wonderful, aesthetically elegant speeches, or speak so that women cry. The point of a political speech is to persuade people of what we think right…….We do not want to be a movement of a few straw brains, but rather a movement that can conquer the broad masses. Propaganda should be popular, not intellectually pleasing. It is not the task of propaganda to discover intellectual truths.”

          “The English follow the principle that when one lies, it should be a big lie, and one should stick to it. If you tell a lie big enough and keep repeating it, people will eventually come to believe it.”

          “It would not be impossible to prove with sufficient repetition and a psychological understanding of the people concerned that a square is in fact a circle. They are mere words, and words can be molded until they clothe ideas and disguise.”

          “The most brilliant propagandist technique will yield no success unless one fundamental principle is borne in mind constantly – it must confine itself to a few points and repeat them over and over.”

          “That propaganda is good which leads to success, and that is bad which fails to achieve the desired result. It is not propaganda’s task to be intelligent, its task is to lead to success.”

          “We shall go down in history as the greatest statesmen of all time, or as the greatest criminals.”

          See:
          https://en.wikipedia.org/wiki/Joseph_Goebbels

        • For other concerns see the NYT editorial board’s response to Steve Bannon’s appointment as Trump’s senior advisor. They did not compare him to Hitler’s propagandist, Joseph Goebbles, but a columnist at the Philadelphia Inquirer has:

          http://www.philly.com/philly/opinion/20161116_Jones__Bannon_like_another_hateful_propagandist__Nazis__Joseph_Goebbels.html

          http://www.nytimes.com/2016/11/15/opinion/turn-on-the-hate-steve-bannon-at-the-white-house.html

    • Trump complains about crumbling national infrastructure and the need for more jobs and proposes Federal spending on these. Republicans repeatedly blocked Obama’s infrastructure jobs proposals, even during the recession.

      All of Obama’s good ideas for helping the white working class were blocked by the Republican-controlled Congress, forcing him to take executive action where he could. Republicans then blamed him for not getting anything done and for “acting like a king”.

      This strategy has been politically effective but won’t work any more. Republicans will soon be responsible for all of government and won’t be able to sit back and harm working families while pinning the blame on liberals or Obama. After their 8-year tantrum, they will finally have to put up or shut up.

      This should be interesting…

      • In some ways you’re making my point. IMO, a good leader would be able to negotiate with their opposition to promote their “good ideas”. Obama proved early on that he is not a good leader so he resorted to his “pen and phone”. Many other presidents, even when confronted with an opposition congress, have been able to move their ideas forward, Obama couldn’t. How often did we witness him reach out to the republicans and only days later he’s on the TV blasting them. Remember when asked about compromising with the republicans his response was, “we won”. That only shows his inability, immaturity and lack of humility that prevented him from making deals.

        • Perhaps…

          But by this reasoning a fireman is to blame for not saving a family trapped inside a burning building because the angry mob that set the fire is intentionally blocking the way.

          Personally, I think that view shows twisted logic and lack of moral reasoning. Republicans constantly harp about personal responsibility, but in fact they seek a world of rules and standards that apply to everyone but their mob. This is their view of freedom – the ability of the powerful to freely bully and exploit the weak.

          You apparently don’t understand the concept of personal responsibility. In your moral world of “might makes right”, bullies and thugs would be blameless and fault would lie with those who aren’t strong enough or clever enough to resist.

          Republicans are responsible for breaking the economy and for then obstructing a full healthy economic recovery and reforms that benefit the working class. They did this on purpose to see that Obama failed to help white working class families, and they drove racial wedges between them and other powerless minority groups. Their divide and conquer political plan has worked. They chose all this and are responsible for it, not Obama.

        • DannoBoy, Perhaps you should read more carefully before you make your assumptions. What I stated more attributed “might makes right” thinking upon Obama as he used his position to run over his opposition. Where’s the “twisted logic” that you speak of? Obama himself told the republicans to shut up because he won. You apparently don’t understand the concepts that you state and clearly state them without even reading.

        • Lol, Obama blasting republicans and showing immaturity? Didn’t we just elect the master of people blasting on tv?

  • This case is not about overtime pay, it is about: “Where when and how did we give the President the authority to make such laws.” If Obama ever spent any time trying to get cooperation from other people he would have done much better. Instead he just preached at people and use executive orders as if he had declared marshal law on the whole nation. Thank god he will be gone soon!

  • ““This is about the worst news they could get heading into Thanksgiving and the holiday season,” said Vicki Shabo,…”
    the worst news they could get is “You’re Fired.”

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