Overtime Pay Isn’t A Cure-All: Make Work Flexible Without The Red Tape
Proponents of the Obama-era overtime rule claim that arbitrarily raising the cost of labor at a new, higher salary threshold would help workers achieve a better work-life balance. Not only is this attitude paternalistic and insulting to workers, who presumably do not know best how to manage their own time, the regulation would impose billions in costs on job creators and reduce flexible schedule options for hardworking Americans.
But the overtime rule is held up in court, so for now, American businesses have been spared the crushing regulatory costs that would come with it. In November 2016, an Eastern Texas U.S. District Court put a temporary hold on the mandate and ruled that the Department of Labor (DOL) did not possess authority to raise the overtime salary threshold so high. This is because Congress only gave the DOL the power to define which employees are eligible or exempt from overtime based on what duties they perform, not how much they earn. “If Congress intended the salary requirement to supplant the duties test, then Congress, and not the Department, should make that change.”
As the nation’s employers await a final ruling in the case, it is worth remembering that the last thing employers and workers need is another government wage mandate that further restricts how individuals may work and employers may run their business.
Instead, work/life decisions are best made by workers themselves. Survey after survey shows that workers rank flexibility as a major priority, just below compensation. This rings true even more so for millennials. A recent survey conducted by Deloitte on millennials finds that when you take pay out of the equation, work-life balance and flexible work schedules stand out when evaluating a new job opportunity. An Ernst & Young survey came to a similar conclusion, which found millennials would change jobs and location to work at an employer that offers “flexibility and better manage work and family life.”
But, even beyond the overtime rule, antiquated wage and hour laws impede employers and employees from coming up with creative solutions to allow for flexible work schedules that workers desire.
One solution to that problem is a proposal from Representative Martha Roby (R-Ala.) to amend the Fair Labor Standards Act, the primary federal wage and hour law, to expand choices when it comes to workers’ time. The Working Families Flexibility Act allows employers to offer employees what is known as compensatory, or “comp,” time, instead of overtime wages. With this legislation, a worker would be allowed to choose whether to take overtime compensation or receive paid “comp” time, both accruing at 1.5 times overtime hours worked.
It is important to note that the option of taking comp time is completely voluntary and up to the will of the employee. Furthermore, employees would be able to cash in their comp time at any point during the year.
Although there are always critics of legislation that gives workers greater choice in their employment terms, this is not a radical piece of legislation. For many years, federal, state and local government employees have been afforded the option of accruing comp time.
As with any policy, some workers may view overtime pay as far more important, so this option would not appeal to them. However, many families are juggling hectic schedules. The ability to accrue more paid-time off to spend with their family may be greatly appreciated.
The important aspect of this legislation is that it gives workers another choice in how they wish to be compensated, either in the form of overtime pay or receiving more paid-time off to spend with loved ones. Government should not stand in the way of employers and employees coming up with work arrangements that benefit both parties.
Originally posted to The Hill.