BUSINESS TEL:   281.593.1690

BUSINESS FAX:  832.218.1996

Breaking News

Today’s Labor Updates

Today’s Labor Updates:

Obama Making Millions More Americans Eligible for Overtime

United States: Finally Some Good News From The Labor Board

Unions need to ponder how to stay relevant


Business Day

Obama Making Millions More Americans Eligible for Overtime


President Obama announced Monday night a rule change that would make millions more Americans eligible for overtime pay.

The rule would raise the salary threshold below which workers automatically qualify for time-and-a-half overtime wages to $50,440 a year from $23,660, according to an op-ed article by the president in The Huffington Post.

“Right now, too many Americans are working long days for less pay than they deserve,” the president wrote.

The administration has the power to issue the regulation, which would restore the overtime salary threshold to roughly where it stood in 1975 in terms of purchasing power, without congressional approval.

Advocates for the change immediately hailed the decision.

“The president said he wanted to go big here and he did,” said Jared Bernstein, a former White House economist who co-wrote an influential report on the benefits of expanding overtime pay after leaving the administration in 2011. “I can’t think of any other rule change or executive order that would lift more middle-class workers.”

At least two candidates for the 2016 Democratic presidential nomination, Gov. Martin O’Malley of Maryland and Senator Bernie Sanders of Vermont, have urged action on the overtime regulations.

Conservatives and business groups have bitterly opposed the idea, warning that it will cost jobs. The National Retail Federation, a trade group, has argued that expanded overtime will “add to employers’ costs, undermine customer service, hinder productivity, generate more litigation opportunities for trial lawyers and ultimately harm job creation.”

The rule, which would most likely be completed in 2016, would give workers whose salary is between the current threshold and the new threshold a raise if they work more than 40 hours a week. Advocates on both sides of the issue expect the policy to be challenged in court and perhaps in Congress as well.

Republicans could, for example, attach a so-called rider undoing the change to must-pass appropriations measures later this year.

The momentum for the rule change increased after Mr. Bernstein and a colleague, Ross Eisenbrey of the Economic Policy Institute, wrote their report in late 2013, one of a number of papers the Labor Department commissioned to commemorate the 75th anniversary of the Fair Labor Standards Act.

By March 2014, the president had been won over, ordering the department to revise federal overtime rules. What followed was escalating pressure from labor, liberal activists, and Democratic politicians encouraging the administration to expand overtime eligibility as broadly as possible, despite pushback from businesses.

That was particularly true after reports last fall that the administration was considering a more modest rule change.

“We made it known that critics are going to criticize them no matter what they do,” said Kelly Ross, deputy policy director of the A.F.L.-C.I.O. “If what they want to do is have an impact on wages, they need to go big here.”

Assuming the rule is put in place, economists believe that many employers will most likely reduce workers’ hours so as to save on overtime pay. Even so, the White House believes the rule could affect nearly five million workers in the short term. Meanwhile, any attempt to scale back hours could increase hiring.

Over the longer term, the effect of the rule could diminish substantially as employers offer new hires a lower base wage. This could make their overall pay, including the higher overtime wage, equivalent to what comparable employees make today in the absence of the overtime rule.

In that case, Mr. Bernstein said, future workers would only benefit if they end up working more overtime hours than the employer expected when negotiating their wage. Under the proposed rule, the overtime threshold will be indexed to some measure to rise over time, although the exact measure isn’t likely to be settled until after a public comment period.

Correction: June 30, 2015

An earlier version of this article misstated which workers would be covered by an overtime rule change. The change would affect all workers earning below $50,440, not just hourly workers. The article also misstated the measure to which the overtime threshold would be indexed. The measure has yet to be determined; it is not the case that it would be indexed to some measure of inflation.


United States: Finally Some Good News From The Labor Board

Last Updated: June 29 2015

At least some good has come out of the Supreme Court’s finding that President Obama’s recess appointments were invalid in Noel Canning. By virtue of the Supreme Court’s decision, the Labor Board reconsidered its decision in Fresenius USA (pdf) and concluded that an employer acted lawfully when it discharged a union supporter for lying during an internal investigation into who scribbled vulgar, offensive, and arguably threatening statements on union newsletters in the employer’s break room.

Before you get too excited, the Board took pains to point out that it assumed the employee’s vulgar statements were protected.  Additionally, the Board noted that it will find that an employee is privileged to lie during internal investigations where the employee has a legitimate interest in shielding his section 7 activity from his employer. But the Board said it will recognize an exception to the right to lie about section 7 activity where the questioning and lie relate to the employee’s job performance or the employer’s business.

In this case, the Board found the discharge permissible because the investigation had a legitimate business interest. Specifically, the employer received a number of complaints from female employees that the statements were intimidating, vulgar and offensive and its investigation of those complaints was consistent with its anti-harassment policy and with federal law. The board also noted that the investigation did not pry into the employee’s support for the union, but questioned him solely on the handwritten comments the allegedly harassing comments. Also, the employer’s discharge was consistent with the employer’s past practice.

Takeaways: The Board’s decisions on where to draw the line between permissible and impermissible employee speech are anything but clear. Employers should get experienced legal advice before addressing these issues.


June 28, 2015 8:00 AM

Unions need to ponder how to stay relevant

By Mary Kramer

In a couple of weeks, the United Auto Workers and Detroit automakers will kick off contract talks to replace four-year pacts that expire Sept. 14.

As Dave Barkholz has reported for our sibling publication Automotive News, the UAW hopes to eliminate or significantly change the “tier two” wage structure it approved in 2007 to help save the Detroit 3 and create jobs.

As the industry has rebounded, plants have hired thousands of new workers. Today, nearly 30 percent of the Detroit 3’s hourly workers are paid tier-two wages, which are roughly at least $10 an hour less than tier one.

For the union, the two tiers rub against the grain of the “equal pay for equal work” union philosophy. For the automakers, according to Barkholz, each additional dollar per hour in wages costs the automakers about $100 million.

Eventually, all this will play out among unionized suppliers, too, because supplier contracts mirror those of their biggest customers, the Detroit .

Tiered wages and transplants seem to be the big issues for the UAW’s future.

The union has been stymied in its attempts to organize foreign automakers with plants in the South; the Volkswagen plant in Chattanooga, Tenn., was its last failure. So it now looks as if it is trying through the back door — by trying to organize suppliers that have some unionized plants already.

In a largely PR/pressure tactic, Lear Corp. has been picketed for allegedly creating unsafe working conditions at a small foam plant in Alabama that the UAW is trying to organize. Lear has a lot of unionized plants, but its customers for the Alabama plant are decidedly non-union.

So Lear has no interest in angering them by putting out the welcome mat for the UAW at that plant.

What do the Lear workers want? That could be settled with an election, but the UAW wants Lear to agree to a “card check” process — which is more susceptible to peer pressure than the secret-ballot process an election would afford.

But beyond the issues of tiered wages and transplants, the issue for all labor unions is relevance. Despite broad public concerns about economic inequality in the U.S., workers don’t seem to be clamoring for union representation as the solution.

How can unions grow without answering the question “Why aren’t they?”


Comments are closed.