Though it was far from front-page news, the Obama administration’s Labor Department action this month on overtime pay may be one of the most significant of his entire presidency.
Prior to the new rules change, employees earning more than $23,500 a year (a salary close to the poverty level) could be re-classified as managers, allowing their employers to avoid paying them the time-and-a-half overtime premium, or even paying them any extra at all for working more than 40 hours a week. While manufacturing workers with supportive unions are usually able to prevent such re-classifications and do receive time and a half, many service workers are not protected.
The Labor Department just raised the salary cap to $47,000, meaning that some 12 million Americans will now receive more pay for their work, or that employees will not be required to work more than a 40-hour week. The $23,500 ceiling has been in place for decades; were it to have kept pace with inflation, it would now be about $69,000. Still, this is real progress.
To the extent that the new rules discourage long working hours and increase overall employment, they are a godsend, though for the lowest-paid workers, they must be coupled with pay raises. It should be understood that the original overtime provisions in the 1938 Fair Labor Standards Act were designed to stop the use of overtime and spread work around. But as benefits became a larger part of the compensation package, it turned out to be more profitable for businesses to hire fewer workers and work them longer, even with the time-and-a-half provision.
The new rules, and the right to health care provided by the Affordable Care Act, provide far more freedom and protection for workers from onerous work requirements. As many as two million Americans were able to leave jobs they hated with the passage of Obamacare, because the loss of those jobs wouldn’t mean the end of health insurance for them.
Time for a national discussion of work and leisure
What all of this should stimulate is a new national discussion about the nature of work in America, and the age-old idea of work-leisure balance. The Eight Hours Song, sung by workers in the 1880s, concludes with the chorus:
Eight hours for work
CHANGING THE
RULES OF WORK
John de Graaf