War on Women? Overtime Pay Regulations
November 20, 2014
The Obama administration is proposing to change the regulations surrounding overtime pay. While hourly workers can expect overtime pay for any work over 40 hours in one week, as can salaried workers earning less than $23,660 per year, salaried workers earning above that amount are not entitled to receive overtime pay.
A new regulation from the Obama administration, however, would require overtime pay for those who make less than $50,000. What's the problem? It could significantly reduce flexibility. According to Diana Furchtgott Roth, director of Economics21 at the Manhattan Institute, employees -- especially working parents -- should think twice before applauding the proposed rules. She explains:
- Many of the affected salaried workers would prefer to be able to take time off in exchange for their extra hours worked. Instead, those hours will be subject to overtime pay requirements.
- Employers will have to keep close track of workers' hours for fear of lawsuits. This could lead many employers to quit allowing employees to work from home, a benefit that many working parents rely on.
Furchtgott-Roth explains that many working mothers need to be able to balance work and home priorities -- if their child becomes sick, they could exchange extra hours of work for time off. Mandating overtime pay, on the other hand, reduces that flexibility and limits mothers' ability to ask for needed time off.
Furchtgott-Roth suggests a different solution to the administration's overtime pay proposal: allowing employers to provide employees with 1.5 hours of time off for every hour of overtime worked.
Source: Diana Furchtgott-Roth, "Obama's War On Working Women," Real Clear Markets, November 18, 2014.
Browse more articles on Economic Issues