Point Austin: Hours to Burn
When they promote you to “supervisor,” their hands are in your pocket
I'm sure most Chronicle readers will join me in thanking Texas Attorney General Ken Paxton for helping save them from the horrors of overtime pay. On Nov. 22, a lawsuit filed by Texas and 20 other states (joined by business groups) against the federal government won a temporary injunction, suspending a U.S. Department of Labor regulation that would have raised the threshold for the "managerial" exemption for overtime pay from a 2004 standard of $23,660 a year to a princely $47,476. In a press release about the (still temporary) victory, Paxton didn't mention the salary levels involved, only the defeat of federal tyranny.
"[T]he administration assumes that through force of will alone," declared Paxton, "it could order a new economic reality into existence. The finalized overtime rule hurts the American worker. It limits workplace flexibility without a corresponding increase in pay and forces employers to cut their workers' hours. All in all, it exchanges the advantages of negotiated benefits, personal to each worker, with a one-size-fits-all standard that only looks good in press statements. Not on my watch."
Paxton's sneering bravado is a lame attempt to disguise the stakes in the lawsuit, and the actual "hurt to the American worker." Essentially, Paxton and his 20 co-plaintiffs are defending the power of employers (including state governments as well as businesses) to continue to impose their own "economic reality" on underpaid workers – that is, forcing them to work overtime without additional compensation.
The court's ruling in their favor – on the grounds that Congress didn't specify pay levels as a standard – is particularly puzzling, since the pay standard has in fact been raised seven times (most recently in 2004) since the 1938 Fair Labor Standards Act was enacted, and this is the first time a court has questioned that process. In the short run, it means that the new regulation does not take effect as planned, on Dec. 1.
Users and Used
Although East Texas Judge Amos Mazzant didn't say so in his ruling, it might well be that the scale of the increase – more than twice the current salary standard – had given him pause. But a couple of simple calculations confirm that the current pay level – $23,360, about $11/hour – is inadequate as a living wage, let alone a managerial ("executive, administrative, or professional") salary. The new standard – equivalent to $23/hour – would serve to support a family, although it doesn't even address the common practice of employers routinely requiring their "managers" to be on call at all times, to sub for any absent employees, and in fact to regularly work overtime hours without any additional pay – certainly not time-and-a-half.
But Judge Mazzant ruled that if Congress wanted to require a fair day's pay for more than a fair day's work, they could have done so. If you don't like working for nothing, you can quit. (This is what's known in employer and libertarian circles as the "free market.") Worth noting for amusement is that the DOL established the new salary level at the "40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, currently the South." Always rising, never risen.
One useful indicator of the actual burden the new rule placed on businesses is the earlier decision by Wal-Mart to raise all its managerial salaries to a base of $48,500 – and its subsequent announcement that it wouldn't be rescinding the increase in the wake of the court ruling. It was the titular "managers" in the middle of that wage gap who were suffering most under the old standard, and let's hope the bump they receive from Wal-Mart (and perhaps other businesses) compensates somewhat for what they lose in autonomy – i.e., mandatory, "free" overtime.
As things now stand, roughly 4.2 million U.S. employees (including an estimated 370,000 Texans, who should send their thanks to AG Paxton) will go without the overtime protections provided by the new standard. Any appeals of the ruling will undoubtedly move into 2017, and to a DOL under the Donald Trump administration. On the campaign trail, Trump has said both that "wages are too high" and that the federal minimum wage should be raised, so who knows if he holds any real position – although Paxton's GOP coalition is a likely harbinger of things to come.
Of the many labor advocacy organizations responding to the court's ruling, a statement from Emily Martin of the National Women's Law Center hits home: "These workers, the majority of whom are women, earn modest salaries, work long hours, and have just been told that they will still be denied fair pay. Currently, a promotion to 'shift supervisor' at a salary of just $24,000 a year could cost a woman her overtime pay even if she was required to work 50 hours a week."
In case you're wondering, AG Paxton's annual salary is listed at $150,000. But he probably works long hours.