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Employers Claim Overtime Pay Is Bad For Their Employees

On Behalf of | Jun 8, 2016 | Wage And Hour Claims

Late last month, the Department of Labor announced an overhaul to wage laws that will make millions more U.S. employees eligible for overtime pay. Immediately, business interest groups and their affiliates protested the ordinance, claiming it would harm the very workers it’s meant to protect.

“Newly overtime-eligible workers may lose out on opportunities to expand their careers,” a spokesman for the National Retail Federation told CNN Money. Employees, many warned, will see their hours and benefits cut. They will lose flexibility to work remotely after the traditional workday is over-catching up on emails, planning business travel-as employers will need to monitor work schedules more tightly. According to critics who spoke to the New York Times, this “would impinge on workers’ freedom by preventing them from working as long as they like, and could damage an employee’s status and sense of self-worth.”

The more likely reality, however, is that employers will scramble to find ways to circumvent paying their workers the overtime wages they’re now owed.

Will The New Protections Actually Protect Workers?

In 1975, more than 60 percent of salaried workers qualified for overtime. Today, that number is roughly 7 percent. Simply put, countless lower-middle-class and middle-class individuals are working more than 40 hours each week without being properly compensated. By December, when the Department of Labor’s directives take effect, more than 4 million additional employees will become eligible for overtime. (Some estimates put that number as high as 13.5 million.)

The increase in coverage stems mostly from considerations of salary. Currently, workers who earn more than $23,660 per year can be exempted from overtime pay. The new rules stipulate that, with few exceptions, workers earning less than $47,476 annually are now overtime-eligible.

How Employers Will Endeavor To Offset Costs

Employers who currently demand that their workers put in long hours, but who do not pay overtime, will seek to maintain the status quo. A number of likely strategies have already been identified.

Some employers will increase their employees’ salaries to the new minimum threshold, so that workers will have to continue putting in long hours without additional pay. Other employers will reduce their workers’ base salaries, to offset the new overtime wages they will have to dole out. Additional tactics-more creative and underhanded-are likely to emerge.

When they do, it is important for workers to know their rights, and obtain the necessary help to keep them protected.