Companies May Scrutinize Employee Activity More under DOL’s Proposed Overtime Rule

The battle over the Department of Labor’s proposed overtime rule is heating up. A number of business groups, labor unions, and progressive organizations have met with the Office of Management and Budget to make their case before a final rule is published. But the latest salvo comes from the office of Sen. Elizabeth Warren (D-Mass.).

Yesterday, Sen. Warren issued a report that goes state by state and indicates how many employees would become eligible for overtime pay under the proposed overtime rule. The report uses unpublished analysis from the union-backed Economic Policy Institute. But the bulk of the report is comprised of quotations pulled from public comments on the rule from workers as well as a few business owners. Each quote basically follows the same theme, which is that individuals deserve overtime pay.

But as I’ve discussed previously, there is significant downside to the DOL’s proposal. Workers lose the flexibility, rural areas are disparately impacted by the rule since it does not take into consideration cost of living differences across the country, and many small to mid-sized businesses will likely have to expend significant resources to comply with the change in overtime regulations. 

However, if you read Sen. Warren’s report, it would seem like there is only upside from another expansive government wage mandate.

Scott U. is quoted in the report:

As a business owner, I support the proposed amendments to this rule. This rule will ensure that more workers are paid fair wages. Not only is this morally right, it also makes economic sense: The rule will help Americans earn more money, which will then be spent to buy products and services. This increased demand will result in job growth.

But Scott fails to mention that there is no rule in place that restricts him from paying his employees whatever he views as a fair wage. And if it was so beneficial to pay employees more without any gains in productivity, most businesses would do so.

Most of the quotes in Sen. Warren’s paper are from workers and they basically all say the same thing:

Workers should be paid for the work they do and using the exemption to force people to work more hours for less pay is wrong.

Yet, a point that is not brought up often in the overtime debate is that many workers spend a lot of their workday performing tasks other than what they are hired to do.’s 2014 “Wasting Time at Work” annual survey found that “[t]he number of people in this year’s survey who reported wasting time at work every day is up to a whopping 89%.” That is up 20 percent from 2013.

Here is the breakdown:

  • 31% waste roughly 30 minutes daily
  • 31% waste roughly 1 hour daily
  • 16% waste roughly 2 hours daily
  • 6% waste roughly 3 hours daily
  • 2% waste roughly 4 hours daily
  • 2% waste 5 or more hours daily

Meaning, 4 percent of the workforce waste at least half the day on non-work activities.

Another survey conducted by, a cloud communication advisor, asked “2063 adults between the ages of 25 and 64 and asked them how many hours they spent on non-work activities during an average work day.”

The results are similar, “80.4% of people waste time at work!”

According to the survey, “The amount of people wasting three or more hours at work was surprisingly high at 18.5%.” That means 1 in 5 workers waste over a third of the day on non-work activities.

The survey estimates how much employers pay to employees to not work:

To put this in perspective, the average American worker makes $47,230 a year, or $22.71 an hour. If we make a conservative estimate and assume most of these people waste three hours per day and are paid an average salary, we see that employers are spending $340.65 a week, or $17,713.80 a year, on wasted time.

Research firm Harris Interactive looked into how much work employees actually conduct. Respondents said that they spend less than half their time at work on their primary job duties, according to 2,000 office workers. Check out the infographic on how workers spend over half their day here. Not all of the activity is completely non-work related but clearly workers could do a better job performing the tasks they are hired to do.

The Atlantic cites several surveys on time wasting activity at work:

One survey reported that the average time spend doing private activities is 1.5 to three hours a day. ComScore reported that this Cyber Monday—despite it being a workday—was the heaviest online spending day in history at $2 billion. According to IBM Digital Analytics, 46 percent of Cyber Monday sales happened between 9 a.m. and 5 p.m. ET.

It is probably not possible to work every second of every workday. And most employers probably do not expect workers to perform primary job duties 100 percent of the time. However, under the proposed overtime rule, many more salaried employees will become eligible for overtime. This may make many employers more conscious about tracking exactly what activity employees are doing and paying them accordingly.

Some low-paid salaried workers, who will become eligible for overtime pay under the new rule, may spend more than eight hours a day at the office, but it is unclear if they are actually working during those hours.