New overtime rules in the works for management

THE OBAMA administration took aim at income this month when President Barack Obama recently signed an order directing the Labor Department to alter regulations of overtime pay for employees in executive and administrative positions.

Currently, salaried employees in those positions who earn less than $455 weekly are automatically eligible for overtime pay. A change could increase the threshold. The current rules were developed in 2004 based on the 1938 Fair Labor Standards Act and specify that salaried workers earning more than $455 do not qualify for overtime pay if a portion of their jobs involve supervisory duties.

Spokespersons for the administration have called the move a necessary measure to ensure that employees are paid fairly for a hard day’s work. They note that the updated rules are expected to impact millions of workers by allowing them to receive time-and-a-half overtime pay.

Income inequality has been a major focus of the administration this year, with overtime orders falling closely on an executive order to increase minimum wage in this election year.

Opinions of the new plan are varied as employers anticipate how the changes will affect their business practices.

Some small business advisors speculate that start-up companies might discourage start-up efforts and other forms of entrepreneurships. Others consider that employers may feel the need to reduce employees in favor of outside services when possible. Obama has also been accused of presidential overreach.

Representatives from public entities must consider how these regulations might change their community employees and area business practices.

Martins Ferry City Auditor Rita Randall said employees are paid overtime based on wage and hourly base while management are salaried.

“It is what it is, regardless of the hours they work,” she said. “If I had a salaried position I was expected to work when I was needed.”

St. Clairsville Mayor Robert Vincenzo noted a salaried employee has advantages over an hourly worker.

“If that law goes into effect, it would definitely change the way businesses operate. It would be a different way of management,” he said. “I think it would be a bad idea myself. Not every salaried person is the same. Some are more compensated than others.”

He went on to add that there may be some merit in certain cases, depending on the employees and their duties.

“At this point, because this is all proposed, until we would see the Labor Department’s new rules, it’s hard to determine whether or not those policies would affect Belmont County,” said Commissioner Mark Thomas. “If they do, it would be a finite number of people. All the elected officials are paid by Ohio Statute State Legislation, so they aren’t affected as salaried employees.”

“It’s a little premature at this point,” he said, saying it was too soon to speculate regarding how new regulations would impact the county. “We’re basically talking those who are considered managers/salaried employees.”

He added that overtime is paid throughout the county. One situation was this past winter with its historic bad weather, which guaranteed overtime in the water and sewer department, the engineer’s department, roads and other factors of infrastructure.

DeFrank can be reached at rdefrank@timesleaderonline.com