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by Sam Bocetta
In May of 2016, President Barack Obama announced his administration's final overtime rule - a Presidential Memorandum that promised to boost pay for millions of Americans.
In laying the groundwork for this order years earlier, Mr. Obama had proclaimed in Wisconsin, “We've got to make sure that this economy works for everybody who's willing to work, everybody who's willing to do their fair share…This is an issue of basic fairness. If you work longer and you work harder, you should get paid for it.”
In March of 2014, Mr. Obama issued a Memorandum for the Secretary of Labor, urging the department to modernize overtime regulations by “streamlining the existing overtime regulations” and “address the changing nature of the workplace.”
By the summer of 2016, the Obama administration presented the Final Rule aimed to regulate the FLSA's “white collar” overtime exemptions. The DOL (Department of Labor) touted this bill as a win for salaried employees, saying that it would make those employees earning less than $50,000 eligible for overtime pay of time-and-a-half – twice the previous threshold of $23,660.
The official estimate was that the rule would raise wages across America to the tune of $1.3 billion. Sounds good for the little man, right?
Unfortunately, what this really meant for the business world was that companies would be forced to search for cuts in the wake of such an enormous cost increase. Budgets would have to be slashed, programs would have to be compromised, and the entire infrastructure of businesses would be irrevocably damaged.
At the very least, even a successful company would find it far more cost-effective to hire more workers rather than give now-overpriced overtime to existing employees. This isn’t all bad – after all, it does raise employment levels – but a great many workers rely on a few hours of overtime each week to make ends meet.
The affected companies took the issue to court, and in late August, Federal Judge Mazzant of the US District Court for the Eastern District of Texas issued a final ruling to invalidate the new overtime rule.
Judge Mazzant ruled that the bill was going “too far” in basically eliminating employees who perform exempt duties and make less than the high salary threshold.
In certain cases, an exempt employee may make as little as $23,600 per year or otherwise perform duties that are considered exempt from overtime pay under the Fair Labor Standards Act (FLSA). As anyone who makes less than $50,000 annually in America can tell you, their time is extremely valuable.
If an employee is making $23,000 per year and he's forced to work overtime without compensation, that is cutting into the time he or she could be spending working a second job to make ends meet. Obviously the Judge understands that this regulation is in effect a "war on the poor" even if the Obama administration did not.
Mazzant even denied a motion by the AFL-CIO, preventing them from arbitrating or in any way interceding in the case.
It was a move that many had been waiting for with bated breath. When the rule was finalized back in the summer of 2016, it was intended to go into effect in December of the same year, but Mazzant had issued an order that enjoined it from taking effect at the time. As a result, almost a year went by with everyone waiting to see how things would shake out.
While the rule is not dead quite yet, the ruling virtually guarantees that even if the rule ends up going through, it will be substantially changed, and if the bill survives, it will most likely be at smaller salary levels.
The Far Left are already taking pains to reverse Judge Mazzant's two consecutive rulings and the DOL is issuing a fresh RFI (Request for Information) in an effort to push a new rule-making process. We can't decide whether they know that this rule would have damaged businesses and want that to happen, whether they know businesses would be damaged and don't care, or whether they think businesses have endless pots of money and simply have to be forced to pay their employees more regardless of employee productivity.
Exactly why the DOL is attempting
to save the
law after President Trump promised to torpedo it may seem to be a
head-scratcher,
but it may be due in part to their desire to have salary
levels become the new way of determining who is eligible for
overtime pay. Bureaucrats
are generally as happy to find a new way to increase their influence
and power as businesses are to find the next fidget spinner they can
sell to people who don't need any more toys.
Said Angelo Amador, the executive director of the Restaurant Law Center, “It's great to see a Department of Labor finally taking the time to fully evaluate the impact its regulations will have on businesses.”
As of September 5th, 2017, the DOL are asking the Fifth Circuit to dismiss its appeal of Judge Mazzant's preliminary injunction, arguing that Mazzant's August ruling renders the initial injunction moot. A response is expected by September 25th which is why it is important that American citizens participate in this landmark piece of legislation.
As this story develops, we need to watch out for the opportunity take part in the Department of Labor's outreach for public comment, something they have been calling for since June. The voice of America still matters at least to our courts if not to our politicians.
Sam Bocetta is a retired engineer who worked for over 35 years as a defense contractor for the U.S. Navy, specializing in electronic warfare and advanced computer systems. He teaches in Ottawa, Canada as a part time engineering professor and is the ASEAN affairs correspondent for Gun News Daily.