Business

You won’t get that extra overtime pay around the holidays, after judge’s new ruling

Teresa Barnes works in her office at the Girl Scouts of Silver Sage Council. Barnes also travels with a mobile store so scouts in outlying areas are able to spend their Girl Scout Cookies earnings at the official store. Barnes says she puts in a lot of extra time on trips to Eastern Idaho and elsewhere, but her status as a salaried and overtime-exempt employee would change under the proposed new overtime rules.
Teresa Barnes works in her office at the Girl Scouts of Silver Sage Council. Barnes also travels with a mobile store so scouts in outlying areas are able to spend their Girl Scout Cookies earnings at the official store. Barnes says she puts in a lot of extra time on trips to Eastern Idaho and elsewhere, but her status as a salaried and overtime-exempt employee would change under the proposed new overtime rules. Idaho Statesman file

A federal judge has put a temporary hold on a new federal rule doubling the salary that most workers must earn in order to be exempt from receiving overtime pay.

The sweeping change was set to take effect Dec. 1, giving many more Idaho workers a right to collect overtime pay or get a salary increase.

The White House had estimated about 20,000 workers in Idaho would benefit.

The Economic Policy Institute estimated it would affect 64,000 of the state’s 219,000 salaried employees.

U.S. District Judge Amos L. Mazzant of the Eastern District of Texas placed a temporary injunction on the rule Tuesday, in response to a lawsuit from roughly 20 states. Idaho was not one of the states.

Even without a court challenge, the Trump administration’s takeover in January could end or change the rule, multiple news outlets have reported.

“The rules could have been threatened regardless of court action by President-elect Donald Trump, who has vowed to roll back Obama regulations he argues are hurting the economy,” The Hill reported.

The Society for Human Resource Management noted earlier this month that Donald Trump said during his campaign he “favored a small-business exemption” from the rule. The law already includes such an exemption — except when the employee’s work relates to interstate commerce.

Trump and the Republican Congress could change that, creating a “more robust small-business exemption” or lower the salary level for certain employees, sources told the SHRM.

The change meant that a Nampa fast-food restaurant manager and a Boise clothing-store assistant manager who make salaries of less than about $47,500 a year would have to be paid overtime for working an extra 10 or 20 hours a week.

[Read more: Some Idaho employers face up to new overtime rule, others avoid it]

Chris Miller, a Meridian auto-parts employee, is one of the Idahoans who would be affected if the rule moves forward. He earns more as a salaried worker in his current job — $24,000 — than he ever made in hourly jobs that paid him overtime, he told the Statesman earlier this year. He worked about 185 to 215 hours a month, he said.

“I think it will definitely help increase some of the spirits of people who are salaried and work a lot of hours but don’t get paid for it,” he said in May.

2,000 Idaho state government employees who would be affected by the overtime rule. They are mostly in higher-education; public health; the state's tax commission; and state departments of health and welfare, correction and lands.

Employees and advocates told the Statesman and the federal government the change is overdue. They said employers have taken advantage of overtime exemptions to avoid compensating employees for long days.

But some businesses said it may lead to cuts in jobs or services and may harm employee job satisfaction and flexibility to work outside normal hours.

The current federal threshold under which an employee must be paid overtime is about $24,000 — an amount that has not kept up with inflation since the 1970s. The updated threshold salary of nearly $47,500, under rules issued by the Obama administration, would guarantee overtime protections to about one-third of salaried workers.

This video from the U.S. Department of Labor explains the updated salary threshold rules issued by the Obama administration that would guarantee overtime protections to about one-third of salaried workers.

EMPLOYERS TORN

The Girl Scouts of Silver Sage Council is one of many employers that expected to change their business practices to avoid breaking the new rule.

The Dec. 1 change would make 80 percent of the nonprofit council’s 32 employees eligible for overtime.

“There are 112 Girl Scouts councils [in the U.S.], and this affects every single one,” says Maureen O’Toole, CEO of the Girl Scouts of Silver Sage Council, which supports 2,400 volunteers and 4,400 girls in Southern Idaho and parts of Oregon and Nevada.

O’Toole said the new rule would mean the Girl Scouts rely more on volunteers. But, she said, it also means employees could spend more time with family.

Boise State Athletic Director Curt Apsey called the wage rule “scary” after it was announced in May. He told the Statesman earlier this year that the organization was trying to figure out the best thing to do for employees, the organization’s budget and the people it supports.

TJ Stevens, general manager of the Idaho’s Bounty Cooperative, told the Statesman in May that the business pays “decent. The employees love what they do and want to do it. They were mad when I explained [the new rule] to them.”

Idaho’s Bounty is a member-owned cooperative that brokers food from local organic, sustainable farms to be sold to grocery stores, restaurants and consumers. It operates on thin margins with just three salaried employees including Stevens.

“To cover the additional cost to our payroll, I would either need to pay farmers less or charge customers more,” Stevens said in May.

Bardenay Restaurant and Distillery owner Kevin Settles was among the Idaho employers who sent feedback to the U.S. Department of Labor last summer, when the Obama administration was considering the new rule.

The “increase would be too large for us to absorb,” so Bardenay would have to make some of its salaried employees go on the clock, Settles warned in May. Bardenay has restaurants in Boise, Eagle and Coeur d’Alene and plans one in Colorado.

When he saw the administration’s final rule, Settles said his reaction was, “Phew. OK. Not nearly as bad as what we’d been expecting.”

Audrey Dutton: 208-377-6448, @IDS_Audrey

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