WASHINGTON — The Obama administration, in a far-reaching effort to improve the lot of workers that has ignited criticism from business groups, announced on Tuesday that it was making millions more employees eligible for overtime pay.
Under the new regulation to be issued by the Labor Department on Wednesday, most salaried workers earning up to $47,476 a year must receive time-and-a-half overtime pay when they work more than 40 hours during a week. The previous cutoff for overtime pay, set in 2004, was $23,660.
“This is a big deal to be able to help that many working people without Congress having to pass a new law,” said Ross Eisenbrey of the Economic Policy Institute, an early voice in urging the administration to take up the issue. “It’s really restoring rights that people had for decades and lost.”
The change is expected to play out in a variety of ways. Once the rule goes into effect on Dec. 1, many workers will receive more pay when they work overtime, but others may end up working fewer hours if employers move to limit their time at work. In other cases, employers may decide to increase the salaries of some workers to push them over the cutoff so that the employers will not have to pay overtime or hire additional workers after limiting hours for existing employees...Just in case you were wondering, Mr. Scheiber directly addresses the point that most of you are thinking (emphasis mine):
Certain categories of workers, like teachers, doctors and outside sales representatives, continue to be exempt from the regulation, though academics primarily engaged in research are not.Over at the Huffington Post, Francis Collins (director of the NIH) and Thomas Perez (the Secretary of Labor) co-wrote a piece, with the final concluding policy announcement (emphasis mine):
In response to the proposed FLSA revisions, NIH will increase the awards for postdoctoral NRSA recipients to levels above the threshold. At the same time, we recognize that research institutions that employ postdocs will need to readjust the salaries they pay to postdocs that are supported through other means, including other types of NIH research grants. While supporting the increased salaries will no doubt present financial challenges to NIH and the rest of the U.S. biomedical research enterprise, we plan to work closely with leaders in the postdoc and research communities to find creative solutions to ensure a smooth transition.This is a pretty darn big deal, in my opinion. It sure sounds like there are many, many universities who are lobbying the White House very, very hard to make sure that this policy gets delayed (and who knows if a President Trump or a President Clinton would change President Obama's rule?). It is also unclear to me how this set of policies gets enforced. However, if it does, here's my set of predicted policy ramifications:
- If you're a postdoc who is making less than $47,476, you will be eligible for time-and-a-half for any hours that you work over 40 hours a week.
- If you're a PI that is paying your postdocs less than $47,476, you will have to track your employees time and either 1) pay them overtime, or 2) bar them from working more than 40 hours a week (which, yes, includes checking work e-mail from home.)
- Postdocs will either get paid more, or work less.
- Hard to say that getting paid more is bad, but...
- I cannot take 100% pleasure in this, because this is the problem with regulation - there will always be someone stuck with a terrible dilemma, assuming actual compliance: postdocs (who may have limited time to do their work) will be forced to work only 40 hours a week, or PIs who had budgeted for postdoc salaries of (hypothetically speaking) $39,000 a year will be forced to either cough up an extra eight thousand bucks, or cut back the hours of their direct reports. This is a non-ideal way to implement a regulation, I feel.