Obama’s Proposed Changes to Overtime Rules – Two Perspectives (Part 2)

In last week’s post, we discussed the USA Today Editorial Board’s support for President Obama’s push to raise the overtime salary threshold. The USA Board’s perspective on the proposal was by and large positive, but Obama’s political opponents have not been pleased. Writing in the Wall Street Journal, overtime threshold push opponent, Andy Puzder, raised some impassioned points in his piece, “Obama’s Overtime-Pay Boomerang: The New Rule Hurts the Very Managers Climbing the Ranks It Claims to Help.”

If you read last week’s post, contrast Puzder’s language and ideas with what the USA Today Editorial Board wrote. Here is how Puzder framed the problem: “President Obama on March 13th signed an order directing the Labor Department to expand the class of employees entitled to overtime pay. Currently, if a salaried employee makes more than $24,000 a year, and he is part of the management — if he manages the business, directs the work of other employees, and has the authority to hire and fire — that employee isn’t exempt from overtime coverage. The President wants to raise the salary threshold, perhaps as high as $50,000, demoting entry level managers to glorified crew members by replacing their incentive to get results with an incentive to log more hours.”

Puzder’s rebuttal to the idea of raising the threshold back to 1975 levels can be boiled down to the opening sentence of his third paragraph: “rewarding time spent rather than time well spent won’t help address [the problem of inequality in United Sates].”

Puzder writes that the loss of overtime is actually not a bad thing — in fact, it can be a good thing. “What [workers] lose in overtime pay, they gain in stature and a sense of accomplishment that comes from being a salaried manager… so many crew members aspire to be managers.”

It’s certainly an intellectually interesting argument. But appreciate the source! Mr. Puzder is no objective observer — he is an active stakeholder in the debate, since he serves as the Chief Executive Officer of CKE Restaurants, a megalithic company that owns major fast-food chains, like Hardee’s and Carl’s Jr. This fact alone does not mean that he shouldn’t have the right to talk about the overtime issue or that he lacks insight into it. However, it does highlight how it’s important to think critically not just about editorial arguments on their face value but also the source and possible biases of the editorialists.
While we all certainly want to workers to be rewarded for spend time well – and to create systems and structures in the economy to encourage hard work and reward merit – this doesn’t change the basic fact raised by the USA Today Editorial Board that “the salary level has been hiked only once in last 39 years… and that move recovered only a fraction of what had been lost to inflation since last time it was raised.”

Moreover, Puzder’s position also fails to acknowledge and deal the fact that “the current overtime threshold – $23,660 a year – is below the poverty line for a family of four.”

The moral, if there is one, is that it’s always important to read and carefully consider both sides of debates like the one over the White House’s overtime threshold push. Doing so will make you a smarter thinker; it will expose you to new ideas; and it will help you come up with more nuanced positions and avoid dogmatism.

For help with your New York wage and hour case or other employment issue (e.g. harassment, discrimination, retaliation, whistleblower, etc.) call (212) 688-5640 to set up your free consultation with the Joseph & Kirschenbaum team, or email us now at info@jhllp.com.