New Obama Overtime Expansion Mandate to send Businesses into Tailspin

There are hundreds of thousands of fairly low-paying jobs that nonetheless qualify as salaried management positions that do not qualify for hourly overtime payments. It is a system that allows young managers to have more flexibility and to gain experience on their way up the management ladder.

The department of labor had set the minimum annual management salary at $23,660 so that younger managers could get the training and opportunity to develop skills and experience without having to be paid overtime in the same way an hourly worker would be paid. The presumption is that an hourly worker is providing “production” and therefore merits a standard rate and and overtime rate since their sole purpose is to produce.

Obama and the labor department have interjected themselves into the equation, and they will cause irreparable harm to the very people they claim they want to help.

A new overtime rule expected to drop Monday has riled up the business community because it will radically expand those qualified for overtime pay.

Under the rule as it is now, managers or administrators cannot qualify for overtime if they have an annual salary of at least $23,660. The Department of Labor (DOL) released a draft proposal June 2015 that would increase the exemption threshold to about $52,000, so more workers can qualify. Business groups warn the final rule could hurt employers and workers if unchanged from the proposal.

“We have no indication, until the final rule comes out, that the administration has been listening to the business community’s perspective,” International Franchise Association Expert Michael Layman told The Daily Caller News Foundation.”When we see the new rule we will know just how much of a headache this will be for franchise business owners and how much workers will be hurt.”

President Barack Obama signed a memo March 2014 compelling his administration to expand overtime privileges to more workers. Business experts warn employers could be forced to reduce their salaried staff to overcome the added cost of labor.

“Employers are going to make changes in jobs in order to limit the amount of overtime pay they may be exposed to,” National Retail Federation Expert David French told TheDCNF. “One of the big changes right away is you’re going to have hundreds of thousands of employees in retail and probably millions of employees across the economy who are going to be reclassified.”

Employees don’t tend to start out in salaried positions and getting one is a huge advantage. Salaried employees tend to have more opportunities to advance within a company and more work flexibility than their hourly counterparts. Being reclassified as an hourly worker could become a huge setback for many employees.

“For the most part we’re talking about highly trained, college graduates who are on the fast-track to senior management,” French said. “This is going to interrupt and interdict their careers and turn them from career orientated professionals back into hourly employees.”

“These small businesses, who may not be aware of this rule, are going to have a very difficult time figuring out if their salaried employees are no longer exempt or really working over 40 hours,” Competitive Enterprise Institute Expert Trey Kovacs told TheDCNF. “They’re going to have to make changes. Either reduce their pay, demote them to hourly workers.”

The White House has argued the rule change is fair to workers and a much needed update. Labor unions have also praised the proposed change. The AFL-CIO noted in a letter September 2015 to the administration that overtime protections have dwindled over the years and the revised rule could help restore fairness in the workplace.

Of course the unions are in favor of the rule because it will push many workers back into the ranks of hourly laborers, which will grow the ranks of potential union members. Management is rarely part of a union, so even though this will hurt many, many up and coming managers, it is very agreeable to labor unions. And for Obama it once again is a way to harm business, to dramatically increase the cost of operations, and to make a statement about what Obama thinks of business and free enterprise.

This cannot just be ignorance on his part, and so we must assume that Obama is intent on damaging workers, businesses, and this nation. And while logically he should be in a prison cell for a long, long time for all he has done, the reality is that the socialist Democrat party continues to laud and praise this charlatan and con man and to ignore the tremendous damage he has inflicted on this nation.




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