According to the USA TODAY, President Obama plans to up the national overtime threshold from $23,660 to $50,000 for salaried employees.
A proposed new rule governing overtime pay will mean bigger paychecks for up to 5 million workers, Obama administration officials said Tuesday.
The change “goes to the heart of what it means to be middle class in America,” said Labor Secretary Thomas Perez.
Business groups and congressional Republicans said the proposal would force employers to reduce overtime hours and perhaps cut the number of workers.
“Overtime expansion would drive up retailers’ payroll costs while limiting opportunities to move up into management,” said a statement from the National Retail Federation.
Cory Fritz, a spokesman for House Speaker John Boehner, R-Ohio, said that “instead of working in a bipartisan way to streamline and modernize regulations,” the Obama administration is “proposing a new executive order that will limit opportunities and increase costs.”
I cannot demonstrate the sheer stupidity of this decision without detailing exactly how it will affect people like me.
I am a salaried retail manager who makes less than $50,000. My paychecks say 40 hours, but I’m expected to work 50 hours and often times I work more hours than that. Why? Because you cannot manage a business in 40 hours a week. At least, you cannot manage a business well in such few hours.
Salaries are only part of a managers pay. The rest of our money we make in bonuses that, depending on the company, can average anywhere from $1500 to $6,000 a quarter and another bonus for meeting annual goals. So if a salaried manager is paid $49,000 a year, but can earn anywhere from $7,500 to $30,000 in bonuses, than his actual pay is anywhere from $56,500 to $79,000 annually. Salaried managers work longer hours in order to ensure the efficiency of their businesses, to ensure profit and sales goals are met, and to analyze and reduce shrink and costs. The more hours a manager works and the more time they invest, the more they tend to get paid.
What President Obama is doing, however, will ensure that retail managers under the $50,000 threshold never get the opportunity to work more than 40 hours a week. Federal Regulations might change, but my contract with my company stays the same. I will still be required to meet sales and profit goals, maintain execution of store standards, reduce costs and expenses, all while working 40 to 60 hours less each month.
So not only will I never see any of this estimated “overtime” money, I will be prevented from spending the time I require to run my store to the highest levels of profitability.
Even if my company allowed me to work 50 hours a week and they were willing to pay my overtime, that would only amount to about another $5,000 a year, at most; but the threat of not allowing me to work that overtime could cost me, and people in similar jobs, anywhere from $7,500 to $30,000 a year. How anyone in my position could possibly celebrate Obama’s proposal is beyond my comprehension.
Unless they are not in it for the money, only desire their base salary, and more than anything, simply do not want to work more than 40 hours a week.
I’ve never seen anyone get ahead in this world working 40 hours a week. Have you?
Some might argue, however, that if it will really have that much of an impact on a companies profitability, why wouldn’t they just give all their salaried managers a raise to $50,001 annually? Then, instead of getting overtime pay, you get a nice fat raise that you see every week in your paychecks.
That’s fine and dandy, except that one of the most expensive costs in our stores is our stores’ managers! The company can’t change their budgets to accommodate increasing salaries in each of their stores without cutting those expenses somewhere else. So, let’s say they give salaried managers $5,000, $8,000, or even $10,000 dollar raises to get us above the overtime threshold, each of those managers will still be less likely to meet their budgets and receive their bonuses which will inevitably cost them far more in performance pay than they gain in their base salary increases.
So, PLEASE Mr. President, don’t help me. You are too stupid to help me and your good intentions will cost me, and hundreds of thousands of Americans just like me, a small fortune – and you will hurt our companies as well. The entire reason that our companies pay bonuses is because of how important profits are to our corporations! People won’t invest if you aren’t showing a profit. But profit, loss, investment, etc. these are concepts this President simply does not understand.
Congressman Brat, if you’re listening, could you please explain to the President how the economy works? He’s clueless!
Article written by: Steven Brodie Tucker