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Some Idaho employers face up to new overtime rule, others avoid it

Audra Kershner works at Girls Scouts of Silver Sage Council in Boise as a volunteer development manager — the same as coworker Megan Schuelke, right. Most employees at the office will change how they conduct their day with the new labor rule that requires employers to pay people overtime if their salary is less than about $47,500 a year. Kershner says the changes will be a good thing for her and others overall, but it will take some adjusting.
Audra Kershner works at Girls Scouts of Silver Sage Council in Boise as a volunteer development manager — the same as coworker Megan Schuelke, right. Most employees at the office will change how they conduct their day with the new labor rule that requires employers to pay people overtime if their salary is less than about $47,500 a year. Kershner says the changes will be a good thing for her and others overall, but it will take some adjusting. doswald@idahostatesman.com

The Girl Scouts may not be an obvious poster child for the national push to pay workers a living wage. But locally, the Girl Scouts of Silver Sage Council is one of many employers that must change how they operate to avoid breaking a law that protects employees from being overworked and underpaid.

A new federal rule scheduled to take effect Dec. 1 will 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.

The Obama administration rolled out its new Fair Labor Standards Act — or FLSA — rule in May. It gives workers, including tens of thousands in Idaho, the legal right to overtime pay.

“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 said at the time.

The change makes it illegal to not pay overtime to employees who make less than $47,476 a year. The current threshold is half that: $23,660.

The new threshold gives the Girl Scouts and most other Idaho employers three main choices: Give salaried employees a raise so they don’t qualify for overtime, keep wages at the same level but start paying overtime when an employee puts in more than 40 hours a week, or change how they operate.

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.

Workers’ advocates applaud the change, saying employers have used overtime exemptions as a way to avoid compensating employees while working them too hard. Some local workers have reported working 50 or 60 hours a week for much less than the new minimum.

It is still unclear how Idaho employers will respond to the the new rule and which employers will be most affected. However, Business Insider found that it will affect nonprofits, government entities and for-profit companies that have lower-wage workers.

For many of our nonprofit members, they’re going to have to cut services.

Caroline Merritt, Boise Metro Chamber of Commerce

The Girl Scouts of Silver Sage has been planning and preparing for months to be ready. Staff members who used to drive to Rigby or Driggs to lead Girl Scouts trainings can no longer, because each hour in the car counts toward the 40-hour limit before time-and-a-half pay kicks in. Staff members used to answer cell phone calls from volunteers on weekends or check their email from home; now that’s for emergencies only.

“Nobody’s job description changed, nobody’s salary changed. It just changed how we do work,” O’Toole says. “This will just have us rely more on our extremely knowledgeable volunteers.”

The positive thing is that it makes sure you spend time with your family.

Maureen O’Toole, CEO of the Girl Scouts of Silver Sage Council

She says this is the first year in at least 16 years that the local Girl Scouts council has budgeted for overtime pay: $12,000.

The rule also pushed the organization to finally adopt an electronic timekeeping system, replacing paper time sheets.

Change causes some business owners headaches

When the rule was announced, Idaho business leaders responded in a range of ways.

Bardenay CEO Kevin Settles said, “Phew. OK. Not nearly as bad as we’d been expecting.” The human resources director of a Twin Falls bank called the change “too far-reaching, especially in rural communities.” TJ Stevens, the general manager of Idaho’s Bounty Cooperative, said employees of the member-owned co-op were “mad.”

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

Boise Metro Chamber of Commerce CEO Bill Connors said the change was just about the last thing Idaho businesses needed.

“As any HR manager will tell you, such a situation sets up a small company, nonprofit or small municipal government entity for some very tough employment decisions,” Connors wrote in an opinion piece for the Idaho Statesman. “Do I cut hours, cut staff or tell loyal salaried employees they have to go back to the time clock?”

Several months later, there are proposals to make the change less extreme, such as a bill introduced in the House of Representatives by Democrats from Oregon, Minnesota, Tennessee and Texas to phase in the new threshold over three years.

But local lawyers say many of Idaho’s employers have taken a head-in-the-sand approach. They either are procrastinating on decisions about how to comply with the new rule, or have yet to do the in-depth analyses needed to figure out which jobs are affected.

“I’m a little worried I’m not hearing more from Idaho employers,” says Pam Howland, a Boise employment lawyer. “It worries me that Thanksgiving’s going to hit, and people are going to say, ‘Oh no. We need you to help us with this.’”

Howland’s law firm and many other organizations have hosted seminars and workshops in hopes of helping employers comply by Dec. 1.

Some for-profit business executives say the analyses were actually easy for them to do. Albertsons and Boise Cascade executives say the FLSA change will have little effect on their companies, because nearly all management-level employees already make more than the threshold.

State, local governments calculating impact

The change will affect Idaho’s cities and other units of government, though they can use comp time in lieu of overtime pay in certain cases.

About 1 percent of the city of Boise’s 1,600 regular employees will be affected, according to M. Megan McJunkin, employment services manager at the city’s Human Resources office. A few of those employees may get raises — and the city is adjusting its pay-plan design in response to the FLSA change — while others may be compensated through time off, McJunkin says.

Some salaried workers who will soon become hourly — and eligible for overtime — see it not as good news but as a demotion, employers say.

Nearly 2,000 state employees are likely to be affected, according to the Idaho Division of Human Resources.

At a minimum, those employees will receive 1.5 hours per hour worked overtime, instead of their current 1-to-1 ratio.

Most of those lower-paid salaried workers are at higher-education institutions, public health districts, the state’s tax commission and the state departments of health and welfare, correction and lands.

There are, however, some special overtime-exempt professions such as teachers, doctors and attorneys.

It is unclear how much the change will affect state agency budgets, says Susan E. Buxton, administrator for the state’s human resources department.

1,960 State employees who are salaried but make less than $47,476

Boise State Athletics: Change will be ‘expensive’

The change will drastically affect organizations that rely on employees to put in extra-long hours during events or seasonal activities, such as college athletics programs.

About 20 percent of the 150 to 160 people who work for the Boise State University athletics department currently make less than $47,476, according to Athletic Director Curt Apsey.

Because the department is so driven by events, such as games and fundraisers, many of those employees do not work normal 9-to-5 schedules.

“It’s athletic trainers, it’s media relations folks, it’s people in our ticket office, it’s operation folks who help run our facilities, people in our marketing department and fundraising areas,” Apsey says. “Imagine the hours that can pile up in those areas. ... My main theme here is that we’re not going to make any quick decisions.”

We’ve got to find a way to manage it financially without giving up the quality of support that all of our teams need.

Curt Apsey, Boise State University athletic director

Apsey says the department is working on how to manage the overtime-versus-salary balance without an excessive hit to the budget or degraded performance.

“It’s going to be expensive, though,” Apsey says. “It’s not a million dollars, but it’s not $25,000 either. ... It’s certainly going to be a financial challenge for us, but it’s not a choice.”

Audrey Dutton: 208-377-6448, @IDS_Audrey. This story appears in the Sept. 21,-Oct. 18 2016, edition of the Idaho Statesman’s Business Insider magazine. Click here for the Statesman’s e-edition, which includes Business Insider (subscription required).

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