You may have missed it amid all the news and noise out of Raleigh and the presidential campaigns, but new federal rules on overtime landed with a serious thud this week.
The Obama administration has been working on the new rules for more than a year. They follow on other wage and labor changes and, predictably, have been met with howls from business groups and anti-labor groups.
Most of the coverage since the announcement has been focused on the impact on large retail and restaurant companies that have used salaried workers in lower-tier management roles as a cheap source of overtime labor.
What hasn’t been mentioned as much is that the rules spell a major shift and a major victory for public-sector workers as well.
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Here in Orange County, where at least six out of every ten dollars earned is paid via public coffers, it means big changes in the way the labor pools for the university, the hospital and school systems are put together, since each of them also has worked the existing overtime rules to their advantage.
Under the current rules, employees deemed to be in some kind of management or supervisory role who make more than $23,660 per year can be denied overtime compensation, which federal law sets at one and half times their usual rate for any hours put in over the standard 40-hour work week. That $23,60 threshold — $455 per week — was set by the Bush administration in 2004. It was first time the amount had changed since 1975. It also wasn’t “indexed” or pegged to inflation or some other indicator to rise with the rest of the economy.
The new rules, which are intended to make up for that lack of indexing, pops the threshold up to $47,476 or $913 per week.
It may not sound like a big deal, but it could be the most FDR-like move this president has made.
The new threshold not only gives relief to the person that Labor Secretary Thomas Perez recently described as an employee who spends 10 percent of the time doing management tasks and stocks shelves the other 90 percent, but also to all those people on campus who are required to put in extra hours for departments and programs yet only earn comp time, or, in some cases, nothing extra at all except the gratitude of their much more well-compensated bosses.
Magnifying the impact of the change on campus and elsewhere is that public employees, especially those drawing a paycheck from the state, are usually paid less than their counterparts in the private sector.
The upshot is that the $47,476 threshold will will require rethinking a public-sector labor strategy that in some cases has been every bit as exploitive as those big box stores with legions of low-paid shifts managers working 60-plus hours on a regular basis.
As expected, the heavily affected businesses are calling it a job-killer and enterprises large and small, including nonprofits and the public sector are assessing its impact.
The thing to keep in mind as you listen to all the blowback is that the only way the new rules will adversely affect you is if you rely on making lower-salaried workers regularly put in more than 40 hours a week without getting paid overtime.
That may be the way things work in a lot of places, but it has never been fair, at least not since late October 1940. And if you based your business, nonprofit or public agency on that concept, you’re getting what you deserve.
Kirk Ross is a longtime North Carolina journalist, musician and public-policy enthusiast. You can reach him at firstname.lastname@example.org