Millions of Americans Will Be Getting a Raise Soon Thanks to This Obscure Rule

Wow - I knew Labour laws in the US offered little protection, but to deny OT based on a salary threshold? What?

Overtime is, simply put, working beyond your contracted hours.

At my employer in the UK, we get OT for any time over our contracted 37.5 hour week at 1.5 times the hourly rate and double on Sundays/Bank Holidays. Not to mention the shift allowance equal to around 20% of our base salary for working nights.

You guys are getting shafted, even with your new rules.

originally posted by: Daedal

I understand that. I'm trying to be optimistic about it you know. If a salaried employee works 55 hours a week now, and if the proposal succeeds, most likely they'd reduce his / her hours to avert overtime pay.

If I were to wager they would go with a pay decrease to correspond with a hour decrease.

Instead of increasing prices to offset the cost, that is if they continued to work over 40 hrs, the hours left unworked could possibly be picked up by a lower wage person, thus increasing hours for some.

Which would mean increased costs and again, two things will happen; they will eliminate positions or they will raise costs to the end user.

a reply to: stumason

It's not just a salary threshold. To be exempt from overtime laws the position also has to be supervisory or professional in nature, and be over the threshold.
The current law is better than when i entered the work force 20+ years ago. Virtually no one in a salaried position was eligible for overtime then regardless of job classification.
Non management employees have gotten 1.5 time over 40 for a very long time.
The problem that created the need for this action is that many businesses will title an employee as management in order to get them in a salaried position to avoid having to pay overtime, but that employee has no responsibilities typical of management, in particular the ability to hire and fire.The biggest abusers that i am aware of in regards to this are retail businesses: grocery, department, and convenient stores especially.

Employers already doing the right thing won't even notice this change, and they aren't all big businesses either.

Did the math last night and the current threshold amount comes out to an hourly wage of around $11.38/hour and it's my opinion that anyone with that wage regardless of whether they are in a supervisory/exempt position deserves time and a half. The new threshold would put the hourly wage to be exempt over $20.

originally posted by: xuenchen
" Millions of Americans Will Be Getting a Raise Soon Thanks to This Obscure Rule "

And then thousands of hourly workers might get laid off.

Employers going to salary based pay and exempt workers and expecting them to work longer hours are a huge part of the reason WHY thousands of hourly workers got laid off.

a reply to: jefwane

Ok, that makes it a bit better I suppose, but even so that does seem like many are getting the crappy end of the stick.

My position would be called "professional", it is salaried and we still get OT and allowances - our Managers get O/T if they cover other shifts, although they get toil (time off in lieu) if they come in for meetings. In fact, if the company didn't pay O/T, they'd soon be up a certain creek without a boat, much less a paddle.

I get that the US is going to be more "business friendly" than elsewhere, but it does seem that sections of the workforce are regarded as a disposable commodity and you have little protections in place to guard from unfair/summary dismissals, pay abuse, holiday entitlement etc. My sister-in-law has just been on FB moaning about maternity leave you get in the US - 12 weeks? Jeebus... That's what you get for moving, I suppose..

This rule should have been tied to inflation, chained CPI, or some other metric last time it was updated and it would have adjusted yearly with no need for this.

Democrats don't like doing that because they like making a big issue out of this because they know they can hit Republicans over the head with it. It's the same reason why we don't have a minimum wage tied to inflation or CPI. This probably isn't as big of a winner for Dems as minimum wage and entitlements simply because the people most likely to benefit from it have better work ethic and ability to move up in the world than those constituencies.

Republicans don't like automatic increases because morals are only for the bedroom and social wedge issues and have no place in business. So they'd rather take the hit over the head by the Dems than explain to their business constituency why they are forcing them to do the moral thing.

a reply to: AugustusMasonicus
Is a company that computes their salaried employees pay based on a regular 50+ hour week being moral to begin with? I argue no, they are not at the current threshold. 23660/52/40=$11.38/hour wage. 23660/52/50=$9.10/hour wage if 50 hours a week are regularly required. I'm not saying an exempt/supervisory employee should never have to work a 50+ hour week, it comes with the job and title, but your example is the exact problem this rule change is made to address.

a reply to: jefwane

The rule change will not benefit anyone except the business. They will limit hours or reduce wages to prevent having to pay overtime.

Either that or you and I foot the bill. It is simple economics.

originally posted by: AugustusMasonicus
a reply to: jefwane

The rule change will not benefit anyone except the business. They will limit hours or reduce wages to prevent having to pay overtime.

Either that or you and I foot the bill. It is simple economics.

No. it will benefit the salaried workers too. And probably the economy as well by putting back the jobs that the corporations cut in their creative ways.

There is no such thing as a contract if you work for a corporation as a salaried/exempt employee. They blow smoke up your ass telling you that some weeks you will work fewer than 40 hours to make up for the extra hours and it balances out. Well it never balances out.

They issue verbal goals telling employees that they are expected to work 50 hours a week to make their "numbers" on which they are appraised for phantom raises and bonuses and merit pay.

And if they decide to pass it on to the consumers of their goods or services and it affects their bottom, well good. Because they falsely portrayed themselves and their business model to their stockholders to begin with, showing false profits at the expense of their employees to make themselves more attractive to investors.

They've lied about their bottom lines for decades now. It's about time someone did something about this creative accounting.

We saw this creative accounting trend start happening and workers losing any voice or they had left when Reagan started killing the unions and the government not giving a crap about longer hours, no vacations, raises becoming non-existent, pensions being stolen and so on. The employees were left SOL, with literally no one to look out for them. And they were even TOLD this. Invest in your OWN future and protect YOURSELF by getting more education and a 401K. Then they let the crooks get the 401Ks too.

The only real blowback will probably be them sending even more jobs offshore to try to keep the illusion of profit going or that the rat companies will move out in greater numbers. Good riddance. Lets start and support new companies.

originally posted by: ~Lucidity

No. it will benefit the salaried workers too. And probably the economy as well by putting back the jobs that the corporations cut in their creative ways.

How so if it comes with a pay cut?

Do you honestly think that any business is going to absorb additional long term salary costs without either trimming payroll or passing the costs onto the end user?

Either way it does not affect them, it only affects the public.

And if they decide to pass it on to the consumers of their goods or services and it affects their bottom, well good.

It does not affect them, it affects us.

originally posted by: AugustusMasonicus

originally posted by: ~Lucidity

No. it will benefit the salaried workers too. And probably the economy as well by putting back the jobs that the corporations cut in their creative ways.

How so if it comes with a pay cut?

Do you honestly think that any business is going to absorb additional long term salary costs without either trimming payroll or passing the costs onto the end user?

Either way it does not affect them, it only affects the public.

And if they decide to pass it on to the consumers of their goods or services and it affects their bottom, well good.

It does not affect them, it affects us.

If they don't absorb it by giving back what they stole from people for decades, then their business model and illusion of profit and lies to the sharholders will have caught up with them and they fail and no one will work for them. There will be other businesses.

The people and workers in this country were so brainwashed into thinking they had to just shut up and be grateful and work the extra hours to do the work of two or more people just to keep their jobs in the horrible economy that they forgot how much power they really have with a little bit of support from either a union or a government or the law.

But what do you think "simply economics"-wise caused a lot of the unemployment, income inequality, and more? The greedy corporations did, not the unions or the people. I'm glad at least some more people are seeing this now.

originally posted by: ~Lucidity

If they don't absorb it by giving back what they stole from people for decades, then their business model and illusion of profit and lies to the sharholders will have caught up with them and they fail and no one will work for them. There will be other businesses.

And remind us all again how this helps the working man?

originally posted by: AugustusMasonicus

originally posted by: ~Lucidity

If they don't absorb it by giving back what they stole from people for decades, then their business model and illusion of profit and lies to the sharholders will have caught up with them and they fail and no one will work for them. There will be other businesses.

And remind us all again how this helps the working man?

If the business built its perception on illusion and on the backs of fearful people willing to do anything to keep a job that abused them, they don't deserve to stay in business. And if they fall, there will be other businesses and other jobs to take up the slack.

We don't need them as much as they need us.

originally posted by: ~Lucidity
If the business built its perception on illusion and on the backs of fearful people willing to do anything to keep a job that abused them, they don't deserve to stay in business. And if they fall, there will be other businesses and other jobs to take up the slack.

Is that so? If you were even remotely correct we would currently have zero unemployment and a workforce surplus.

How many people you know lose their job and have a new one, paying the same or better, the next day?

We don't need them as much as they need us.

In that case you should put your vast business acumen to use and start your own company utilizing the principles you just espoused.

Tell us how it turns out.

a reply to: AugustusMasonicus

Here's a simple economic question for you. Does $23,660 buy the same amount of goods and services that it did in 1975? Because that is the last time this threshold was updated. Obama is actually lowballing the increase. If it were tied to inflation the new threshold would be $51,168. If it were adjusted for inflation and demographic changes it would be around $58k. If it were made to cover the Same percentage of the work force that it did in 1975 it would be around $69k.
I'm no Obama fan, but he's at least half assing a fix on something Carter, Reagan, 2 Bushes, and Clinton failed to address.

a reply to: jefwane

It does not but that is not the point I am making.

Any long term increase is not going to be borne without it either affecting the employees, via pay- or hour-cuts, or the end user who will pick up the cost with an increase in either the finished goods or services.

If I need to sell my widgets for $X to remain profitable and then it suddenly costs me $X+1 who do you think picks up the cost of +$1?

originally posted by: AugustusMasonicus

originally posted by: ~Lucidity
If the business built its perception on illusion and on the backs of fearful people willing to do anything to keep a job that abused them, they don't deserve to stay in business. And if they fall, there will be other businesses and other jobs to take up the slack.

Is that so? If you were even remotely correct we would currently have zero unemployment and a workforce surplus.

How many people you know lose their job and have a new one, paying the same or better, the next day?

We don't need them as much as they need us.

In that case you should put your vast business acumen to use and start your own company utilizing the principles you just espoused.

Tell us how it turns out.

I predicted how it would turn out in 1991.

This next part is fixing the mess the corporations made of this country while we the people who refused to see allowed it.

originally posted by: ~Lucidity

I predicted how it would turn out in 1991.

Wonderful. You still did not answer my questions.

This next part is fixing the mess the corporations made of this country while we the people who refused to see allowed it.

You do realize that nearly every businesses operate this way, from largest to smallest, they all need to remain profitable and they do so by the same means.

a reply to: AugustusMasonicus

I completely understand that all taxes and wage increases are paid by the end consumer. That end consumer might have more disposable income to spend and it comes out a wash.

If central banks were meeting their mandate and ensuring stable prices ( not "acceptable" 2% inflation which halves the value of a $ every 36 years) and allowing mild deflation ( which is the natural state of prices due to technology and productivity increases)
such an action as we are debating would be unnecessary.

originally posted by: jefwane

If central banks were meeting their mandate and ensuring stable prices ( not "acceptable" 2% inflation which halves the value of a $ every 36 years) and allowing mild deflation ( which is the natural state of prices due to technology and productivity increases)
such an action as we are debating would be unnecessary.

That is a whole different can of worms and I agree.

Your example shows why, on every economy of scale, that artificial interference in the market results in increased hardship for the average citizen.