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Kloha, of Midland, Michigan, prides himself on running a clean and honest business, Circle K Service Corp., that has grown for nearly 30 years.
But after the Obama administration issued a regulation last month raising the salary threshold for employees eligible for overtime pay, he’s found himself in a bind.
Under the Department of Labor’s new rule, beginning Dec. 1 any employee making up to $47,476 a year must receive overtime pay.
...
To abide by the new rule, Kloha said, he’s likely going to have to switch the salaried workers making less than $47,476 to hourly, something he doesn’t want to do.
His other option — raising those employees’ salaries to more than $47,476 — isn’t feasible.
“There’s a disconnect between Washington and the rest of the country and what reality is,” Kloha said:
I’m in Michigan. It’s a rural area. We have [industry] and everything, but it’s not urbanized like Washington, D.C., or New York City. Salaries in the range of 35, 40, $50,000 are good wages. With my salaried people, we have an agreement that we come together on what the salary is and what’s expected to do the job. I don’t abuse them, and they don’t abuse their salaried position. My employees are seeing [the switch to hourly] as a demotion.
Here again are government "experts" telling people how to run their business. The old threshold was just above $23K for an annual salary. The administration initially wanted it to be $50,440.
They say it puts more money in people's pockets. There are two sides to that. This implies that business owners will take the loss... that's not going to happen. Business owners have to adjust based on their own individual bottom line. This also affects charitable organizations and colleges as well. Companies are not going to do full time benefits and overtime. Which probably means many people will be moved to hourly employment and lose their benefits.
No individual companies in the Obama Administration... one size fits all. Terrible...
govt. has royally screwed up and they know they are in trouble. not enough tax revenue coming in to pay the bills. the whole minimum wage argument has more to do with raising tax revenue than a living wage. cost-push inflation and "you ain't seen nothin yet".
I'm mixed on this. Im not in favor of diktats from DC. But at the same time, a lot of employers have been abusing the hell out of labor rules by calling someone a "manager" so they can work them 70 hours per week with no overtime at a low wage Retail is notorious for this.
I recall a long thread on this in the Work and Employment forum when the new rules went into effect. As someone who spent many years working in HR Management, I can see both sides of this issue. The old threshold of $455 per week was far too low, but I can see the point made by Mr. Kloha above about how in many markets, $47K is too high. I also agree that many salaried (Exempt) workers who are changed to hourly will view that as a demotion. I personally saw that with many employees when we reclassified hundreds of staff at the University where I worked when the DOL tightened Exemption standards in the mid 2000s.
The bigger issue is that many employers improperly classify workers as Exempt (aka salaried) when they should, in fact, be nonexempt (aka hourly) and paid overtime. Some companies do this out of a poor understanding of what constitutes exempt level work, but plenty of employers do it purposely to screw people out of earning overtime for working long hours, namely first line supervisors and managers in food service, retail etc.
govt. has royally screwed up and they know they are in trouble. not enough tax revenue coming in to pay the bills. the whole minimum wage argument has more to do with raising tax revenue than a living wage. cost-push inflation and "you ain't seen nothin yet".
If that's the case - which I don't think it is - the problem is minimum wages don't really raise tax revenue. It may seem like it does, but it doesn't. Because if the business does not make enough sales to pay the higher wages, that person will be let go.
That's the problem with this. Many owners (the non-abusers) can't afford to raise salaries that high with the amount of business they do. They also can't afford to pay overtime along with all of the benefits to those below the new threshold. It lowers morale of the employee when going from a salaried to a hourly status.
Ultimately - the amount of business and sold products that take place will truly increase tax revenue. The more products are sold, the more owners will have to hire more people to keep up with demand, and that's more people paying taxes.
I'm mixed on this. Im not in favor of diktats from DC. But at the same time, a lot of employers have been abusing the hell out of labor rules by calling someone a "manager" so they can work them 70 hours per week with no overtime at a low wage Retail is notorious for this.
"lot of employers have been abusing the hell out of labor rules by calling someone a "manager""
Is your claim from personal experience or did you just pull it out of your arse?
I WAS a salaried manager, several times, and NEVER experienced what you claim.
I recall a long thread on this in the Work and Employment forum when the new rules went into effect. As someone who spent many years working in HR Management, I can see both sides of this issue. The old threshold of $455 per week was far too low, but I can see the point made by Mr. Kloha above about how in many markets, $47K is too high. I also agree that many salaried (Exempt) workers who are changed to hourly will view that as a demotion. I personally saw that with many employees when we reclassified hundreds of staff at the University where I worked when the DOL tightened Exemption standards in the mid 2000s.
The bigger issue is that many employers improperly classify workers as Exempt (aka salaried) when they should, in fact, be nonexempt (aka hourly) and paid overtime. Some companies do this out of a poor understanding of what constitutes exempt level work, but plenty of employers do it purposely to screw people out of earning overtime for working long hours, namely first line supervisors and managers in food service, retail etc.
As I recall when I interviewed for a salaried job it was MY OPTION to take the job or NOT, so your "claim" of, "but plenty of employers do it purposely to screw people out of earning overtime for working long hours is B.S.
Kloha, of Midland, Michigan, prides himself on running a clean and honest business, Circle K Service Corp., that has grown for nearly 30 years.
But after the Obama administration issued a regulation last month raising the salary threshold for employees eligible for overtime pay, he’s found himself in a bind.
Under the Department of Labor’s new rule, beginning Dec. 1 any employee making up to $47,476 a year must receive overtime pay.
...
To abide by the new rule, Kloha said, he’s likely going to have to switch the salaried workers making less than $47,476 to hourly, something he doesn’t want to do.
His other option — raising those employees’ salaries to more than $47,476 — isn’t feasible.
“There’s a disconnect between Washington and the rest of the country and what reality is,” Kloha said:
I’m in Michigan. It’s a rural area. We have [industry] and everything, but it’s not urbanized like Washington, D.C., or New York City. Salaries in the range of 35, 40, $50,000 are good wages. With my salaried people, we have an agreement that we come together on what the salary is and what’s expected to do the job. I don’t abuse them, and they don’t abuse their salaried position. My employees are seeing [the switch to hourly] as a demotion.
Here again are government "experts" telling people how to run their business. The old threshold was just above $23K for an annual salary. The administration initially wanted it to be $50,440.
They say it puts more money in people's pockets. There are two sides to that. This implies that business owners will take the loss... that's not going to happen. Business owners have to adjust based on their own individual bottom line. This also affects charitable organizations and colleges as well. Companies are not going to do full time benefits and overtime. Which probably means many people will be moved to hourly employment and lose their benefits.
No individual companies in the Obama Administration... one size fits all. Terrible...
Explain to us what the problem is with him switching these employees to hourly...
I feel like you just blindly jumped to this biz owners defense without checking how much bs he was shoveling into your ear.
Kloha, of Midland, Michigan, prides himself on running a clean and honest business, Circle K Service Corp., that has grown for nearly 30 years.
But after the Obama administration issued a regulation last month raising the salary threshold for employees eligible for overtime pay, he’s found himself in a bind.
Under the Department of Labor’s new rule, beginning Dec. 1 any employee making up to $47,476 a year must receive overtime pay.
...
To abide by the new rule, Kloha said, he’s likely going to have to switch the salaried workers making less than $47,476 to hourly, something he doesn’t want to do.
His other option — raising those employees’ salaries to more than $47,476 — isn’t feasible.
“There’s a disconnect between Washington and the rest of the country and what reality is,” Kloha said:
I’m in Michigan. It’s a rural area. We have [industry] and everything, but it’s not urbanized like Washington, D.C., or New York City. Salaries in the range of 35, 40, $50,000 are good wages. With my salaried people, we have an agreement that we come together on what the salary is and what’s expected to do the job. I don’t abuse them, and they don’t abuse their salaried position. My employees are seeing [the switch to hourly] as a demotion.
Here again are government "experts" telling people how to run their business. The old threshold was just above $23K for an annual salary. The administration initially wanted it to be $50,440.
They say it puts more money in people's pockets. There are two sides to that. This implies that business owners will take the loss... that's not going to happen. Business owners have to adjust based on their own individual bottom line. This also affects charitable organizations and colleges as well. Companies are not going to do full time benefits and overtime. Which probably means many people will be moved to hourly employment and lose their benefits.
No individual companies in the Obama Administration... one size fits all. Terrible...
If paying OT impacts an employer significantly, then that employer has been using the salary classification to screw over his/her/its workers by forcing them to regularly work more than their regular hours without compensation. It's called exploitation. Having workers working a couple of hours OT once a month or maybe putting in an extra 8 hours for a couple of weeks during "peak season" isn't going to greatly impact most businesses. Having to now pay OT to all the workers who were regularly forced to work 50 hour weeks for their supposed 40 hour salaries in the past will. Cry me a river and save the crocodile tears over how it "hurts" workers. It only hurts exploitive employers.
All this businesses should do what Trump does. he just doesn't pay them and waits to be sued.
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