Overtime Overhaul: 5 Takeaways

Whether you love or hate the U.S. Department of Labor’s new overtime rules, with $1.2 billion a year expected to shift from employers to employees, they are proof positive the government can change lives dramatically. Those shouts of joy you hear are employees finding out they are getting a raise or will work fewer hours without a cut in pay. The screams of anguish are from those employers who already were barely breaking even and now wonder how they’ll pay for it all.

Here are five takeaways from the May 2016 overtime rule changes:

Make less than $47,476 a year? Come Dec. 1 you likely will be eligible for overtime (1.5 times your usual hourly rate) for time worked in excess of 40 hours a week. Compare that to the prior $23,660 floor before the “white collar” work overtime exemption might kick in. (Note some forms of bonuses/commissions now can count as up to 10 percent of the $47,476.)

But… are you a teacher/professor, academic administrator, doctor, lawyer, judge or outside sales rep? Then you are likely not eligible for overtime regardless of your salary. However, grad student and post-doctoral researchers making less than $47,476 now are likely to be overtime eligible.

When do an employee’s duties become irrelevant to whether overtime applies? There’s no overtime for those paid over $134,004, previously $100,000.

Can an employer lower base pay for future work so that even with overtime pay the total yearly paid an employee does not increase? Yes, if the employer is willing to risk ticking off workers in a relatively tight job market (5 percent national unemployment rate).

How did such a major change happen without legislation? The new floor is based on a percentage of current average wages (for the lowest-paying region of the country, the South). In many past decades the salary threshold went unchanged, in disregard of inflation and increases in national average wages. The figures now will get updated every three years.

Even without these changes, overtime rules were complex, such as determining whether they applied to an employer as an organization (at least $500,000 annual gross revenues for most types of employers) or nonetheless applied to particular employees. The Labor Department considers an employee to be involved in interstate commerce (and so potentially subject to overtime) even if just regularly making telephone calls to other states. With overtime suits all the rage, employers may be making a losing bet to assume they are among the select few who are exempt as an entity and have all their employees exempt too.

The rules do not affect the federal minimum wage, at $7.25/hour (about $15,000/year) since 2009. It would have to be around $11/hour to equal the buying power of what the minimum wage in the 1960s offered, per the Labor Department. With Hillary Clinton supporting a phased-in minimum wage increase to $15/hour and Donald Trump alternating between support for raising, lowering and preserving the current rate, expect it to continue to be a hot topic.

In the meantime, feel free to continue to argue about whether the new overtime rules are an improvement. Just don’t tell me that nothing ever gets done in Washington, given this parting gift from President Obama to those who might have thought the American Dream of the middle class had left them behind.

Texas grocer H-E-B offered comments to the proposed rule supporting the bump in the minimum salary threshold, explaining that it already paid “competitive wages.” It is among those rare employers who have learned that higher wages can be as important to competing as are lower prices.

> David Schleicher is an attorney with offices in Waco, D.C. and Houston.

As originally appearing in Waco Tribune-Herald, page A8, Sunday, May 22, 2016.

Trump’s HUGE convention

The convention center floor will be surrounded on all sides by a giant opaque glass wall, serving in lieu of projection screens. Deemed the only one enough of a lightweight to pull it off, throughout the proceedings and high above the crowd on a red velvet seat, Marco Rubio will swing to and fro, dressed in frilly knickers.

Day One: The convention opens as Nickleback’s “Burn it to the Ground” plays over loudspeakers (all other rock groups having obtained court orders against The Donald using their music for his campaign). Then silence.

As the attendees sit in rapt attention, little people dressed in tuxedos and ball gowns skip in from each side toward the middle, singing “We’re off to see the Wizard, the wonderful Wizard of Oz.” They join hands in a circle around the center ring. Again silence. Darkness. A pause.

Suddenly bright, giant images are flashed on the inside of the glass wall surrounding the delegates: Undocumented immigrants crossing rivers with weapons in their hands. Pictures of Chinese merchants in ancient garb but shown pickpocketing hardworking Americans. Generic death metal music plays. Images fade as Lee Green’s “God Bless the USA” plays.

Then an image of a cackling Hillary Clinton on a broom zooms around the wall, holographic monkeys flying behind her. Booing by delegates allows time to fade to silence. Complete darkness. Spotlight above center ring as a cloud of fog dissipates to reveal The Donald slowly descending from above in a white robe, a laurel wreath holding his hair in place. A familiar musical fanfare by Richard Strauss plays as Donald gestures a blessing on the congregation.

“DONALD! DONALD! DONALD!” the delegates exclaim in ecstasy as he is lowered to the ground, with no visible means of support. Now, “TRUMP! TRUMP! TRUMP!” He motions for them to quiet. The Donald speaks. “The man who has no sense of history is like a man who has no ears or eyes. Strength lies not in defense but in attack. How fortunate for leaders that men do not think.” The delegates: “TRUMP! TRUMP! TRUMP!”

The Donald: “With a single blow we must destroy the enemy . . . without regard of losses . . . a gigantic all-destroying blow. Demoralize the enemy from within by surprise, terror, sabotage, assassination.” The delegates: “TRUMP! TRUMP! TRUMP!”

The Donald: “I love the women. Ladies, I want your vote and I love you.” The circle of little people around him drops beneath the floor, then returns, this time full of beauty queens (Miss Armenia, Miss Estonia, Ms. Latvia, Ms. Lithuania, etc.). Announcer: “Thank you, Mr. Putin, for providing our hostesses tonight!” Male delegates hoot, whistle and cheer. The Donald: “I love the ladies and they love me, lots of love from their hearts. Wherevers.”

Darkness. A long silence as the set is changed. Lights back on. Pan the crowd, showing convention center now is mysteriously uncrowded (assume many of the female delegates will have left). The Donald: “Magic! I made them disappear! I’ll do the same to Hillary and every other enemy of America.” Crowd applauds in a deafening roar.

A helicopter appears from above, barely missing the still-swinging Marco, lands and takes The Donald away. Day One of the convention ends. Pan crowd to show delegates weeping at departure of their great leader.

Day Two: Hunger Games to select vice-presidential candidate.

Day Three: a coliseum look. Ted Cruz and Jeb Bush released into center ring to face off against each other and then a lion.

Day Four: Dennis Rodman, Coach Bobby Knight and other athletes explain The Donald’s foreign policy positions.

Day Five — closing night: Delegates wear large foam hands reading, “Make America Giant Again.” Ben Carson offers closing prayer. Trump tells delegates he loves them and says to “now, go out there and beat the sh– out of those protesters!”

Estimated cost: $3 million, assuming use of undocumented workers. Initial audience testing will confirm it went over bigly with The Donald (and even with The Hillary). But Paul Ryan is seen running to the restroom with his hands over his mouth.

David Schleicher is an attorney with offices in Waco, D.C. and Houston and member of the Waco Tribune-Herald Board of Contributors. This piece originally appeared in the May 10, 2016 paper.