New regulations for overtime pay limit flexibility and will affect women and millennials hardest of all workers.
The good intentions of the rule revision to ensure workers are properly classified and earn their due compensation will do little to improve their position.
“Studies have shown that raising the overtime pay ceiling will generally not raise workers’ overall compensation. Instead, employers will pay a lower base salary, so that with overtime, the pay packet is about the same,” Diana Furchtgott-Roth wrote for Economics 21.
Economists aren’t concerned about job losses from the new rule, but wage reductions for new workers could take effect to balance out any wage changes.
The rules will double the salary level ceiling where employers are required to pay workers overtime to $50,440, and will be released by mid-May. The rules clamp down on flexibility because it requires monetary compensation. That prevents workers from working more hours on some days for time off on others. The rules will effectively eliminate flexibility for family duties and other important non-work events throughout the day.
“The choice of comp time instead of overtime pay is a valued perk that is available to upper-income earners, making their lives easier. It should also be available to lower-paid employees,” Furchtgott-Roth wrote.
That could deal a hard blow to telecommuting. “Telecommuting appears, instead, to have become instrumental in the general expansion of work hours, facilitating workers’ needs for additional worktime beyond the standard workweek and/or the ability of employers to increase or intensify work demands among their salaried employees,” Sociologists Mary C. Noonan and Jennifer L. Glass wrote in a 2012 report for the Bureau of Labor Statistics.
With the new rules, telecommuting loses its flexibility. As 70 percent of millennials would prefer to telecommute than work in an office, that cuts against the interests of the next generation of workers. Though telecommuting has over-promised on its success for an improved work-life balance, the perks of flexibility should not be ignored.
Better rules to ensure workers receive their due isn’t objectionable, but rules that harm worker interests aren’t vindicated by best intentions.
