A sweeping change set to take effect Dec. 1 would give an estimated 20,000 Idaho workers a right to collect overtime pay or get a salary increase.
The change means a Nampa fast-food restaurant manager and a Boise clothing-store assistant manager who make $35,000 annual salaries must be paid overtime when they work an extra 10 or 20 hours a week.
Chris Miller, a Meridian auto-parts employee, is one of the Idahoans who would be affected. He earns more as a salaried worker in his current job than he ever made in hourly jobs that paid him overtime. But with a salary of $24,000 a year and working 185 to 215 hours a month, the change is welcome, he said.
$47,476 The new minimum salary for an employee to be exempt from overtime pay, starting Dec. 1
“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.
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 say it may lead to cuts in jobs or services and may harm employee job satisfaction and flexibility to work outside normal hours.
The change “is too far-reaching, especially in rural communities across the country,” said Becky Nelson, human resources director of First Federal, a midsize bank based in Twin Falls with about 225 employees.
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 Wednesday by the Obama administration would guarantee overtime protections to about one-third of salaried workers.
You’re deprived of your dignity when you know you’re working much, much harder and much, much stronger than you’re getting compensated for.
Vice President Joe Biden
“We pay decent. The employees love what they do and want to do it. They were mad when I explained this to them,” said TJ Stevens, the general manager of the Idaho’s Bounty Cooperative, a member-owned cooperative that brokers food from local organic, sustainable farms to be sold to grocery stores, restaurants and consumers.
The cooperative 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.
Bardenay Restaurant and Distillery owner Kevin Settles was among the employers who sent feedback to the U.S. Department of Labor last summer, when the Obama administration was considering the new rule, with a slightly higher salary level than the one announced Wednesday.
People say that if you can’t meet this bottom line then you shouldn’t be in business. It’s not always so black and white.
TJ Stevens, general manager, Idaho’s Bounty Cooperative
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. Bardenay has restaurants in Boise, Eagle and Coeur d’Alene and plans one in Colorado.
After seeing the final rule, Settles said Wednesday that the new salary level is above what he’s paying four or five of his newest management-level employees. For them, he must decide whether to give them raises, start paying them overtime or make another change to comply with the new requirements.
His reaction to the new rule was, “Phew. OK. Not nearly as bad as what we’d been expecting.”
Nelson said she is not sure how the change could affect First Federal.
Nelson had submitted comments to the federal government about the new rule last year, too. She warned that raising the salary requirement would “increase costs to our bank ... in an industry that is already heavily burdened by regulation.”
She also argued the bank would be signaling to previously salaried employees “that they are not an important part of the success and management of our bank, and we will now require you to track your time on a nonexempt basis. They feel this is a demotion from the status they worked long and hard to obtain.”
“For those who will have a change in the exempt vs. nonexempt status, this can feel like a step back,” she said.