Labor Department offers tips on avoiding overtime pay


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w4rma
January 6, 2004, 01:00 PM
New labor rules expected to take effect early this year

The Associated Press
Updated: 6:33 p.m. ET Jan. 05, 2004

WASHINGTON - The Labor Department is giving employers tips on how to avoid paying overtime to some of the 1.3 million low-income workers who would become eligible under new rules expected to be finalized early this year.

The department's advice comes even as it touts the $895 million in increased wages that it says those workers would be guaranteed from the reforms.

Among the options for employers: cut workers' hourly wages and add the overtime to equal the original salary, or raise salaries to the new $22,100 annual threshold, making them ineligible.

The department says it is merely listing well-known choices available to employers, even under current law.

"We're not saying anybody should do any of this," said Labor Department spokesman Ed Frank.

New overtime regulations were proposed in March after employers complained they were being saddled with costly lawsuits filed by workers who claimed they were unfairly being denied overtime. But the regulations themselves have stirred controversy over how many workers would be stripped of their right to overtime pay.

The issue is being seized by Democrats in their attempt to win back Congress and the White House.

A final rule, revising the 1938 Fair Labor Standards Act, is expected to be issued in March. The act defines the types of jobs that qualify workers for time-and-a-half if they work more than 40 hours a week.

Overtime pay for the 1.3 million low-income workers has been a selling tool for the Bush administration in trying to ease concerns in Congress about millions of higher-paid workers becoming ineligible.

But the Labor Department, in a summary of its plan published last March, suggests how employers can avoid paying overtime to those newly eligible low-income workers.

"Most employers affected by the proposed rule would be expected to choose the most cost-effective compensation adjustment method," the department said. For some companies, the financial impact could be "near zero," it said.

Employers' options include: Adhering to a 40-hour work week. Raising workers' salaries to a new $22,100 annual threshold, making them ineligible for overtime pay.
If employers raise a worker's salary "it means they're getting a raise — that's not a way around overtime," Frank said. The current threshold is $8,060 per year. Making a "payroll adjustment" that results "in virtually no, or only a minimal increase in labor costs," the department said. Workers' annual pay would be converted to an hourly rate and cut, with overtime added in to equal the former salary.Essentially, employees would be working more hours for the same pay.

The department does not view the "payroll adjustment" option as a pay cut. Rather, it allows the employer to "maintain the pay at the current level" with the new overtime requirements, said the Labor Department's Wage and Hour Division administrator, Tammy McCutchen, an architect of the plan.

Labor unions criticized the employer options.

Mark Wilson, a lawyer for the Communications Workers of America who specializes in overtime issues, said the Bush administration was protecting the interests of employers at the expense of workers.

"This plan speaks volumes about the real motives of this so-called family-friendly administration," Wilson said.

He says cutting workers' pay to avoid overtime is illegal, based on a 1945 Supreme Court ruling and a 1986 memo by the Labor Department under President Reagan.

But McCutchen disagreed. If changes were made week to week to avoid overtime, they would be illegal. A one-time change is not, she said.

"We had a lot of lawyers look at this rule. We would not have put that in there if we thought it was illegal," she said.

"Unless you have a contract, there is no legal rule ... prohibiting an employer from either raising your salary or cutting your salary," she said, adding, "We do not anticipate employers will cut people's pay."

The final plan does not require approval from Congress. That hasn't stopped Democrats and some Republicans from trying to block the rule, thus far unsuccessfully, out of fear that millions of workers would become ineligible for overtime.

Department officials say about 644,000 higher-paid workers would lose their overtime eligibility. But the proposal says 1.5 million to 2.7 million workers "will be more readily identified as exempt" from overtime requirements. Labor unions claim the figure is about 8 million.

The Labor Department is aware of lawmakers' concerns has read tens of thousands of comments about the proposal, McCutchen said.

"We understand what the public concerns are and we're going to be doing our best to address them," she said. "It's important to allow us to finish that process so we can back up our words with some good-faith action."

© 2003 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
http://msnbc.msn.com/id/3882629

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jmcc11
January 6, 2004, 01:11 PM
Two questions.

1. What does this post have to do with firearms?

2. Why does a Socialist keep posting on a firearms related forum?

bountyhunter
January 6, 2004, 01:13 PM
Wal Mart could issue a Master's thesis on the subject. In fairness, McDonalds pioneered the field as far as 40 years back. It's really simple:

1) Any worker who works a total of less than 40 hours a week is a "part time employee" and not eligible for OT.

2) A "trainee" is not eligible for OT.

3) Illegal aliens almost never complain to the labor department when they get screwed out of their pay


Remember all those high school kids at McD with that "trainee" cap on way back when? They wore that for eight months while they worked 70 hours a week for about $1.05 (take home pay) per hour (back in 1969). When they were there too long to be a trainee, they got the boot and they brought in some other schmuck.

I remember to this day seeing my buddies paycheck from Farrels ice cream parlor. He worked 16 hours per week and his net pay was $16.05. His base pay rate was about $1.30, but they had the standard deductions as well as "food expense". You were required to eat your meal there on your break and buy their food at retail prices. The "work breaks" were unpaid because "part time" workers (under 40 hours) were not entitled to paid breaks.

Nothing new here. For as long as I can remember, poor people have been getting screwed like a two dollar hooker by major corporations who have bought loopholes around the minimum wage law. Been there, done that.

bountyhunter
January 6, 2004, 01:18 PM
Two questions.

1. What does this post have to do with firearms?
.

You mean it's not as "firearm related" as the other topics in this forum like:

Group Seeks to Eliminate Sodas in Schools

Bush to Seek Immigrant Benefit Protection

(SC) High School Drug Sweep Yields Class Action Lawsuit

Peta antics now Terrorism

7.62FullMetalJacket
January 6, 2004, 01:20 PM
1. What does this post have to do with firearms?

Exactly

2. Why does a Socialist keep posting on a firearms related forum?

Because we value all opinions here at The High Road. Even though we may not like them :uhoh:

ReadyontheRight
January 6, 2004, 01:26 PM
I still want to hear w4rma's opinion on 9mm vs. 45 ACP.

Bruce H
January 6, 2004, 01:58 PM
Overtime pay is the single greatest revenue producer ever divised. Overtime pay always puts you in a higher bracket. More witholdings. You may eventually get some back as a refund but the govt. gets more money to play with.

w4rma
January 6, 2004, 02:06 PM
I still want to hear w4rma's opinion on 9mm vs. 45 ACP.Like the three bears: 9mm is too small, .45 ACP is too large, but .40 S&W is just right. :)

Sort of. But .40 Smith & Wesson is the a very good comprimise for pistol ammo between stopping power-penetration and accuracy-concealment, IMHO.

buzz_knox
January 6, 2004, 02:18 PM
As someone who has litigated FLSA cases, all I can say is good. This area of the law is so screwed up it needed to be modified. And after seeing employees lie through their teeth to try and show how they were being mishandled and mistreated, I could care less. They were happy to have managerial duties in their job description when it came time for advancement, but they sure were quick to say the duties were meaningless when it came to getting paid as what they were, managers.

7.62FullMetalJacket
January 6, 2004, 02:20 PM
Wow. w4rma weighs in. Good for you.

The reason that business must circumvent the labor code, and why the government is now suggesting ways around the labor code, is because, like any government program, it is past its useful life.

There should be no government interference between management and labor. Every employee should make their own contract with the prospective employer for employment. Market rules. Free trade. The cream floats.

w4rma
January 6, 2004, 02:37 PM
In deregulated free trade. The cream sinks. It's a race to the bottom as buisnesses are forced to search for ways to cut corners on everything from safety of their products and employees to the wages/salaries/benefits/job security of their employees to the point where they have to move their factories and buisnesses overseas where the standard of living is much lower. The law that was recently passed will result in more overtime and less pay per hour, which also means less free time and less time with your family.

7.62FullMetalJacket
January 6, 2004, 02:55 PM
The cream sinks. It's a race to the bottom as buisnesses are forced to search for ways to cut corners on everything from safety of their products and employees to the wages/salaries/benefits/job security of their employees to the point where they have to move their factories and buisnesses overseas where the standard of living is much lower. The law that was recently passed will result in more overtime and less pay per hour, which also means less free time and less time with your family.

That pretty much describes what is happenning now, does it not? The problem is over-regulation, not a shortage of government mandates.

w4rma
January 6, 2004, 03:01 PM
Name the regulation that is causing U.S. jobs to be exported to India and China? Name the regulation that is causing mean U.S. salaries and wages to stagnate and drop.

If the problem is OVER-regulation, then it should be easy to answer that question.

7.62FullMetalJacket
January 6, 2004, 03:39 PM
Have you read US labor law? or OSHA regulation? You do realize that it would take more space to rebutt your presumption that there is space on this server? If you can count the number of ways that government intrudes in your every day life, then multiply it ten-fold for business just for employee issues.

In general, what causes busineseses to flee is the high cost of labor which is driven by the high cost of insurance due to litigation (meaning we need tort reform and worker's comp reform) and labor law (everything from minimum wage to mandated benefits) and OSHA (every movement a worker makes, every task performed, is regulated specifically or by the general duty clause). In many cases, government regulation takes resources from a business that would otherwise be spent on a better process that is found IN THE MARKET OF IDEAS, not by some bureaucratic flunky that can not make it in the real world. Labor laws force employers to become the nanny for each worker. If the employee has any problem, it is automatically the employers fault.

You are pretty good at internet reseach. On the federal level look for Department of Labor for labor law and OSHA.gov for safety.

The only thing that will prevent jobs from leaving the country is a rehabilitation of the nanny state, tort reform, and a change in tax policies. Otherwise, the hungry nations will get the jobs.

Well, I always forget, that our esteemed leaders could pass a law forbidding the loss of jobs. :rolleyes:

boogalou
January 6, 2004, 03:58 PM
w4rma - Do you have any idea how much government regulations cost the american consumer? Where the added expense of meeting government regulations are passed on to that consumer?

Do you have any idea how much government regulation has stifled the productivity of business and labor?

Name the regulation that is causing U.S. jobs to be exported to India and China?

Try the increasing number of environmental regulations on the books. Or to be specific, the Great Lakes Initiative & unfunded Federal mandates. Michigan has some of the strictest environmental laws around, to bad the State is broke and can't enforce them. Reason? The State has lost revenue because business found greener fields someplace else. So the State basically shot itself in the foot by listening to tree-huggers who wanted to forward their own agenda at the expense of everyone else.

Name the regulation that is causing mean U.S. salaries and wages to stagnate and drop.

Take your pick.... from the FDA to OSHA, they all cut into company profits, which ultimately hurts labor/consumers/standard of living.

I'm not saying that the Government should be totally laizzes-faire, but much of todays regulations make as much sense as cutting butter with a chainsaw.

moa
January 6, 2004, 04:09 PM
One other way to avoid paying overtime is "promote" an employee to "salaried" job level. The promotion probably means more base pay, but no overtime pay.

That way whether you work 40 hours a week or 100 hours a week, you get paid the same. Also, employer can just keep piling work up on the salaried employee. Been there and done that.

But then again the trade off may be you end with an employee so valuable the employer is afraid of loosing them.

The best person to work for is yourself. First hired, and last fired.

dustind
January 6, 2004, 05:14 PM
It's a race to the bottom as buisnesses are forced to search for ways to cut corners on everything from safety of their products and employees to the wages/salaries/benefits/job security of their employees

Companies have to compete for quality you know. People will not buy unsafe products that do not work. Workers will not work at lower paying jobs when they can get higher paying ones.

to the point where they have to move their factories and buisnesses overseas where the standard of living is much lower.

That is crazy, if things did get better for companies they would be more likely to stay, not leave. They flee to other countries to escape regulations here.

In simplest terms. Companies do not like regulations, that is a given. If we lower the regulations then companies will be happier being in America. Thus, they will stay. By your logic companies are moving over sees because there are so many regulations in third world countries.

Mike Irwin
January 6, 2004, 05:54 PM
As part of our contract with the FedGov't, my company requires salaried workers to work roughly 2 hours of unpaid overtime per pay period.

Hardly anyone does it.

I should be a salaried employee, but they brought me on board as an hourly when I joined the company 5 years ago, which means that I'm exempt from the unpaid OT requirement. I'm paid all OT that I work, which in the past has been a nice way to pad the savings account towards the purchase of a new toy.

Unfortunately, my hourly is so high that I've been informed that it's very likly that with my next promotion I'll be given a nice bump in pay, and a jump over to the salaried ranks. Sigh.

Hkmp5sd
January 6, 2004, 06:09 PM
The most common way to avoid OT pay is when an employ hits 40 hours for that week, send him home. The company I work for is allowed to work an employee 16 straight hours, so if they have an emergency on Monday, they can work you 16 hours, 8 off, 16 hours, etc. until you hit forty. Then send you home for the remainder of the week and bring in someone else.

However, company policy has a little clause that requires anything over 8 hours per day (or 10 hours or 12 hours if that is your standard workday). They have found a way around that too.

If a problem occurs at say, 11AM, and they know they will be working on it overnight, they will send several employees home and then bring some back to work 4pm-8pm. The others will have to return at 8pm. Since they have now had the required 8 hours off, the company will work them from 8pm until 8am and then send them home for the remainder of that day.

Nice for improving employee relations and morale.

moa
January 6, 2004, 06:18 PM
First year I was promoted to salaried employee from hourly paid employee, I actually made less money than in previous years and probably worked the same number of hours.

bountyhunter
January 6, 2004, 06:25 PM
w4rma - Do you have any idea how much government regulations cost the american consumer? Where the added expense of meeting government regulations are passed on to that consumer?

No, but during the years my wife served as president of the county hospital's nursing union, I got PhD in how management will screw workers if you give them even an inch of slack. The reason there are laws to protect workers rights and wage minimums is that they were so horrifically violated in the past by "free market companies" that reform became necessary. You want the good old days? Go down to Mexico or over to India.

It's true such laws get abused and it drove us crazy that the union had to defend worthless workers we would have rather kicked to the curb, but the bottom line is you either protect rights or you don't: the law can't choose which cases are frivolous without some kind of judication process even though that is sometimes wasteful. Freedom ain't free and protection has a price tag as well.

You want a true life example? The county employs attorneys and medical specialists whose job it is to review the current contracts and look for "opportunities" by disputing the "intent of the language" in the contract. You should see how much money and time got burned fighting those ploys by the county to cut pay or steal benefits, and 99.9% of them were completely frivolous.

THEN THEY FOUND A GOOD ONE!

The contract said every employee's benefits package allowed them to get the lowest cost health care option (which was Kaiser) without any co-pay, and better medical plans could be selected for added deductions (like Blue Cross). Then one day, every employee noticed a big chunk gone from their check for "medical plan" even though they were under Kaiser. The county attorney had realized the contract did not stipulate Kaiser by name, just said the "lowest cost plan" was available at no cost. So they created a fake "County Medical Plan" available through the county hospitals where all the welfare patients go and that was now the base plan for dirt cheap cost... and the Kaiser plan cost about $350 more each month which was now taken from the pay. Using that ploy, the county was able to gouge about $350/month out of every county employee for medical coverage without negotiating a new contract, thus reaping a massive dollar windfall in benefits they no longer would have to pay. This one was actually upheld in court and the employees were just screwed.

Later that year my wife was going to the contract negotiations for the year when the skunk that pulled this off drove up in her new S-class Mercedes.

"Is that the bonus you got from the county for the mediacl plan scam?"

She didn't answer, just smiled as she walked in the building.

boogalou
January 6, 2004, 07:04 PM
You want the good old days? Go down to Mexico or over to India.


BH - Go to any search engine and type in "Indian economy deregulation". You might be surprised.

I'm sorry to hear about your wifes misfortune. Looks like the county was trying to cut costs. Maybe because of excessive regulations?

Let me give you an example from where I'm at. I run a wastewater treatment plant, and as you may know, environmental controls get stricter almost every year. The only way that I can continue to meet the State permit and still keep costs under control is by applied technology. That applied technology is generated by businessmen who see a demand in the marketplace and supply the goods to fulfill it. There is no way that I could meet todays enviromental regulations using 25 year old technology. The market has made many of the processes I use more efficient or replaced them with better processes. I always wonder how many enterprising businessmen have been discouraged in improving or inventing the next wizbang because government regulations kept one hand tied behind their back.

MikeB
January 6, 2004, 08:21 PM
For a firearms related example of this consider the rules now in existence concerning the manufacturing of firearms. Would John Browning have been able to design and build such incredible firearms under the current regulations. The licensing involved in being able to design new automatic weapons are prohibitive for your average inventor. What incredible new designs for fireams could we have had if things were still the way they were when Browning was designing his firearms.

7.62FullMetalJacket
January 6, 2004, 08:49 PM
Excellent point. We all ask what the next gneration of firearm will be. It could be that innovation is stifled due to the regulatory and litigation climate. I also heard here that R&D is s big capital expenditure these days. The R&D staff is probably full of lawyers rather than engineers. :eek:

Glock Glockler
January 6, 2004, 09:21 PM
Bullocks to being firearms related, this is not General Discussion, that board must be forearms related, not Legal & Political.

w4rma,

Out of curiosity, if given the choice of those employees not getting overtime or losing their jobs completely cause the companies go to India or China, which one would you prefer?

MikeB
January 6, 2004, 09:30 PM
Now wait a minute I never said it had to be firearms related. My objective was to use an example that would resonate with the audience.

7.62FullMetalJacket
January 6, 2004, 09:44 PM
This argument applies to any product or service. The indirect costs of the dead hand of government are more than significant.

There are those that believe that government regulation, and the attendant costs, only bring the "true" value of the product to bear. Well, you better let the chinese know this, because they are not playing the same game. I talked to a manufacturer that has a plant in china. The cost of labor is not even considered when bidding jobs. :what: Yep, the cost of labor is so cheap that it is inconsequential. How do we compete with that situation with our regulatory burden? We can not. However, we can become more competitive in the skilled/professional market, which is how India and other benefactors are hurting us.

dustind
January 6, 2004, 09:49 PM
BountyHunter: The solution is to not get insurance through your employer. Employee insurance is horrible because it assumes you will only be with them for a while so it does not look out for long term care, just immediate savings. Guess how that mess started? WWII .gov regulations prohibiting free market wage increases. Employers had to give benefits in order to compete.

Employers will not try to screw people when they are in simple fair contracts, laws mess things up. If someone is only paid X dollars an hour they will get that, it is so easy that there is no way to cheat them. Plus then they can buy the insurance that they want, and get the retirement plan they want. No one can touch their retirement plan because they will own it separately, benefits that do not exist can not be cut, etc.

Your analogy to Mexico or India does not work either, America became a great country long before regulations set in. Those countries are not where they are due to regulations, or lack of them.

You also can not create wealth by laws, you can only move it around, and you inevitably loose some to inefficiency. Dealing with the gov regs costs more than the wages themselves in many corporations. (that is all regs, not just employment regs)

Another point is that I know what is best for me, not the government, or my boss. I do not need my dear .gov to set money up for retirement at 1/6th what I could conservatively invest it for. I can also read and figure out my own contracts, and may not like what some politician thinks I will like, or what is in his or her best interests to make law.

Minimum wage laws sacrifice large volumes of jobs and only help a few people a little bit. There are large markets denied existence that people would be happy to be in if it was only legal.

AZRickD
January 6, 2004, 11:54 PM
The government has as much constitutional authority to tell my employer how many hours I can work or how much my daughter gets paid for flippin' burgers as it does telling me what guns I can own.... that would be, no constitutional authority at all.

Rick

bountyhunter
January 7, 2004, 05:17 PM
BountyHunter: The solution is to not get insurance through your employer..

Are you saying it is more economical for a single individual to go to Kaiser or Blue Cross and buy insurance as compared to a county with 50,000 employess who can force a much lower cost?

I know something of what medical plans cost, and your equation is upside down. BTW: if you want to know why 150 million Americans have no health coverage, it's because their employers don't offer any and they can not afford to pay $600 per month out of pocket.

Employers will not try to screw people when they are in simple fair contracts, laws mess things up. If someone is only paid X dollars an hour they will get that, it is so easy that there is no way to cheat them. .
Or if they are paid 25 cents per soccer ball sewn, that makes it even simpler.

Your cart is again trying to pull the horse. This government was founded on laissez faire to business (no governmental control) and that brought us the benefits of the 100 hour work week and six year olds working on assembly lines. The protection laws were spawned from outrage over acts so egregious that people could not stand it any more, not from some misguided notion that the government should be in the management business.

Do you think this is only a problem from long ago?

Right now a law suit is being driven against IBM for what they did at their Cottle Road plant back in the 1980's. Two things: workers were exposed to dangerous levels of toxic chemicals during their routine work and IBM also discharged much of the toxic chemicals into the ground water. Why? They knew if they got caught, the fines would be 100X less than the cost of safe disposal. That's a carry over lagacy from when (then ) Governor Reagan gutted the teeth from Cal-OSHA and took away any enforcement bite.

IBM is refusing to settle the suit even though it is clear cut: a brain cancer so rare it shows up about one in ten million: about eight people from that work area died from it. Massive and gruesome birth dfects, liver cancer, skin cancers, it's like a chamber of horrors for a medical journal.

The bottom line is: companies need a conscience enforced on them sometimes and the government is the only one big enough to do it. Minimum wage, safe working conditions, and fair treatment are all in that boat.

Glock Glockler
January 7, 2004, 07:20 PM
Are you saying it is more economical for a single individual to go to Kaiser or Blue Cross and buy insurance as compared to a county with 50,000 employess who can force a much lower cost?

What is to stop 50k people from grouping on their own to barter for a certain plan?

BTW: if you want to know why 150 million Americans have no health coverage, it's because their employers don't offer any and they can not afford to pay $600 per month out of pocket.

1 - The cost of healthcare in America is exponentially higher than it should be due to govt nonsense, if they removed the handcuffs from our industry the cost would be a fraction of what it is now.

2 - So people cannot afford healthcare for themselves but you somehow think that businesses will magically be able to bare those costs? What you're going to do is shut down many businesses that cannot afford those costs. I know of many companies that let all their employees go and are now owner/operator setups because the owner cannot afford to pay for health insurance, Social Security, workman's comp, etc.

So instead of people being employed without health insurance you'd have them unemployed without health insurance. Bravo!

Or if they are paid 25 cents per soccer ball sewn, that makes it even simpler.

Yes, it does. The reason why is because someone is being comped due to their output, which is what generates revenue, as opposed to being comped for their time, which doesnt necessarily generate revenue. You've probably seen this before in a job where people are being paid by the hour and some definately work harder than others. If you could figure out a way to comp them on their output you'd create a far more efficiant and fair system, rather akin to working for a commission.

Your cart is again trying to pull the horse. This government was founded on laissez faire to business (no governmental control) and that brought us the benefits of the 100 hour work week and six year olds working on assembly lines

Wrong again, those conditions were brought about simply due to market forces. People left their farms and moved to the cities voluntarily because it was a better deal for them to work like that than to stay on their farm.

You also dont seem to know that many sweatshops had razor thin profit margins due to market competition, with going out of business for a textile company to be very common. Sure, people were working extremely hard hours in those places but the result was mass produced clothing that was affordable to the masses. New clothing could be bought inexpensively for poor people, who no longer had to rely on used clothing, which often carried germs and diseases. The end result was a big increase in the health and standard of living for a lot of people.

Two things: workers were exposed to dangerous levels of toxic chemicals during their routine work and IBM also discharged much of the toxic chemicals into the ground water. Why? They knew if they got caught, the fines would be 100X less than the cost of safe disposal.

There's a very simple solution to this: remove the liability caps from favored companies so that they may be sued for the full amount of damage they cause, both with the employees and with the owners of the water. If they're faced with spending 100 million by properly disposing of the waste and 750 million in lawsuits if they dont clean thier mess, they'll choose the former.

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