It's Not Just About the Paycheck. Ask Workers.

Bloomberg View , November 29, 2016

She cried when she heard she’d soon be eligible for overtime. They weren’t tears of joy.

She’s a producer for a public radio station who asked that I not use her name. She loves her job but struggles to stretch her “paltry” paycheck to cover rent and other living expenses. She’s exactly the kind of dedicated white-collar worker the Barack Obama administration sought to help with a sweeping new overtime regulation. In May, the Labor Department declared that, as of Dec. 1, most salaried workers earning less than $47,476 a year, or $913 a week, would have to be paid time and a half for anything more than 40 hours a week. (A few occupations, such as teaching and law, are excluded.) The rule more than doubled the existing salary threshold.

Last Tuesday, however, a federal judge in Texas issued a preliminary injunction against the new rule. The final decision still awaits, but U.S. District Judge Amos L. Mazzant III, an Obama appointee, looks likely to agree with the states and business groups suing to block the increase. His ruling suggested that the new standard violates the underlying law by allowing pay alone to trump job responsibilities in deciding who’s exempt from overtime rules. “If Congress intended the salary requirement to supplant the duties test,” he wrote, “then Congress, and not the Department, should make that change.”

The last-minute hold, which came right before a long holiday weekend, leaves employers wondering what to do now. The Obama administration can appeal the injunction, but the Republican Congress and incoming Donald Trump administration have several ways to block the mandate. One is a bill sponsored by U.S. Senator Lamar Alexander that would raise the salary level gradually until it reaches $913 a week in 2020. The measure would also require a study of the first-year impact to determine whether nonprofit organizations and governments should be exempt from future increases.

Regardless of the eventual outcome, the mandate illustrates an all-too-common blindness to the diversity and nuances of employment arrangements. Not every workplace is, or aspires to be, the civil service. Not every worker longs to be on an assembly line. And not everybody is working entirely for money. One size does not fit all.

Just as Trump imagines he can give industrial workers job security by canceling trade agreements, the Obama administration thought it could give managers more money or shorter hours by decree. The overtime rule assumes that employers have a big pot of money somewhere that they’re keeping for themselves instead of paying their hard-working staffs. It also assumes that rigid time-keeping that forces people to work 9 to 5 is a good thing. Announcing the new rule, Vice President Joe Biden called it part of “the basic middle-class bargain that used to exist.” Nostalgia for the Organization Man is a bipartisan affair.

For the radio producer, however, clocking hours just means more paperwork. The new setup also comes with a biweekly, rather than monthly, paycheck, disrupting her household cash flow. (That financial stress had a lot to do with the tears.) And the rigid structure simply doesn’t match the nature of her job: In journalism, things come up and are last-minute and time-consuming, she wrote in a text message. If she has to stay late and that time isn’t approved, who takes that hit -- a colleague who isn’t considered hourly? To her, it doesn’t feel fair or equitable. She’d rather simply have a higher salary, even if it isn’t all the way up to the Labor Department’s magic number.

Supporters pooh-pooh such objections. “It’s not workplace flexibility employers seek, but the ability to continue to exploit low- and moderate-salaried workers,” opined the Los Angeles Times in response to the injunction. In businesses with great market power, there may actually be a pot of money somewhere, if only in customers’ willingness to pay higher prices. But companies facing stiff competition have no such luxury. If they jack up prices, customers will go elsewhere, which is why restaurants and retailers have objected so strenuously to the mandate.

The overtime rule has particularly roiled nonprofit organizations like the producer’s public radio station. “Cutbacks in essential services are predicted by the Salvation Army, youth services providers, home health care services, and blood centers throughout the country,” said U.S. Senator Susan Collins, speaking in support of fellow Republican Alexander’s bill. Nonprofits stretch their payroll dollars by attracting people who are willing to take smaller salaries because they believe in the cause and draw personal satisfaction from the work.

Enthusiastic young graduates put in 12-hour days visiting high schools and reading applications for their colleges’ admissions offices. Museum development assistants schmooze donors at opening night receptions. Biology postdocs monitor experiments at all hours. At the YMCA in Greenville, South Carolina, employees build floats in their spare time so children in a special-needs program can be in the local Christmas parade. “They have a passion for that, they love to do that and want to be a part of that, but they may not be able to now, because that would mean paying them overtime,” says Scot Baddley, the Y’s president and CEO. (Disclosure: My sister-in-law works for the Y.)

Putting such employees on a time clock is not just a burden. It can seem like an insult. Scott M. Fitzgerald, the director of human resources at Otterbein University, told the Chronicle of Higher Education that he’d had staffers at a previous institution cry in his office when told of the change. They saw the shift to hourly pay as a demotion. At the Y, says Baddley, the emotional response has been “intense.” For professionals who’d never before punched a clock, “it was upsetting.”

Or take church employees. You don’t have to be a pastor to see your job as a religious vocation. “For those who work in professional staff positions within congregations, it certainly is viewed as their employment. But in the church, it’s viewed as so much more. It is a ministry,” says Dorothy “d’Rue” Massey Hazel, who advises congregations on human-resources issues as the canon for congregational development and administration for the Episcopal Diocese of Upper South Carolina. Although she knows firsthand how demanding and low-paid such jobs can be, she worries about the psychological effects of punching a clock. “It’s going to shift the culture to such a point that people are going to feel like it’s no longer a ministry,” she says.

Because so many church employees are also congregants, drawing a line between work hours and volunteer time can get especially tricky. Is visiting a church member in the hospital work? How about typing the newsletter? Organizing a food drive? “Now people are having to stop and think: Before I say yes to this volunteer opportunity, I’ve got to think back to the boundaries of my job description,” says Hazel. To make sure everyone is available on Sundays, churches have begun putting formerly salaried workers on weekly schedules that start that day so that they won’t hit the 40-hour limit too soon. What happens on Good Friday remains to be seen.