The new Department of Labor overtime rules have been in the news a lot recently. The change impacts many different sectors of the economy so seeing the reactions from people in different industries has been interesting.
Unsurprisingly the big employer groups have come out against the rule. But there have been some groups of employers who have come out against the new rule that one might would expect to support expanding overtime. For example, non-profits have been a voicing their concerns about the impact the new rule will have on their operations. US-PIRG sent out a press release saying :…to cover higher staffing costs forced upon us under the rule, we will be forced to hire fewer staff and limit the hours those staff can work – all while the well-funded special interests that we’re up against will simply spend more.” It is unfortunate to see US-PIRG criticize a rule that will help the people US-PIRG claims they are working for.
Another group of employees that have been in the news in connection with the new overtime rules are workers in the so called “Prada” economy. Most of the talk about the overtime rule has been in connection with workers like fast food “managers” working 60 hour weeks for $25,000 a year with no overtime. There are apparently many industries, usually seen as glamorous and lucrative, which depend on employees on the lower rungs of the company ladder working long hours for very low pay. A famous movie example is Anne Hathaway in “The Devil Wears Prada”, hence the name Prada economy. Other examples mentioned in the New York Times article are Hollywood production assistants, literary agents in New York, and Washington political campaign workers. A lot of entry level positions require the employee to work well in excess of 40 hours a week for a salary, as acknowledge by the author of “The Devil Wears Prada”, may be below minimum wage if calculated on an hourly basis. The article says assistant literary agents are paid in the $30,000s for 50-60 hours a week, in New York City!
All the owners and company higher ups claim the new rule will force employers to cut back hours, and as a result “Less will be asked of them [the employees], which means they will not receive sufficient career development or see timely advancement and/or promotions.” I suppose this is possible. But it also seems to be an admission a lot of the work done by the lower level employees was either useless busy work or a form of hazing meant to reveal which employees were worthy for advancement in the organization. Changing work rules so employees will no longer receive career advancement or training is cutting off your nose to spite your face. Where will these organizations get future mid level and upper level employees if they all refuse to train or develop talent?
As an aside, in the article Andrew Wylie, the owner of a literary agency is quoted: “He would consider paying time and a half if he asked junior staff members to work overtime, but not if they worked long hours of their own volition. “What am I supposed to do, sit at the door with a stopwatch?” he said. “I’m not going to do that.” Employers are required to keep records of all the hours worked by employees eligible for overtime and/or pay of at least the minimum wage for all hours worked. An employer can’t escape liability for paying for all hours an employee worked by claiming the employee was working of their own volition but without the employer’s express permission. Employers must pay for work they “suffer or permit”. If an employer knew or should have known work was performed then they must pay the employee the appropriate amount for the work.
Unfortunately, many of the people interviewed for the article believe the rule change may not impact the actual hours people work. The culture in these workplaces is such that employees feel like they can’t ask for the overtime they are owed. In regards to overtime during her job with Vogue, the author of “The Devil Wears Prada” explained: “It never occurred to her to put in for overtime pay, which Condé Nast, the magazine’s publisher, provides. “I certainly would not have had that conversation with Anna [Wintour, editor of Vogue]; I would have had to have it with H.R.,… I don’t imagine that conversation took place a whole lot.”
It still looks like the new regulations are on track to come into effect on December 1, 2016. Stay educated and up to date on the rules. Your overtime depends on it.