New overtime rules enacted by the Obama administration will have harmful consequences for small businesses and charities.

The change makes all salaried employees making $47,476 annually eligible for overtime pay if they work more than 40 hours a week. This will lead employers to limit workers’ base salaries, more closely monitor employee work, and limit flexible work schedules, Heritage’s James Sherk predicts.

This isn’t just a prediction — real people are affected. Michigan business owner Rodney Kloha tells Heritage’s Daily Signal that he may “lose a guy who said he’s worked too many years to go back to being an hourly person”:

I’m in Michigan. It’s a rural area. We have [industry] and everything, but it’s not urbanized like Washington, D.C., or New York City. Salaries in the range of 35, 40, $50,000 are good wages. With my salaried people, we have an agreement that we come together on what the salary is and what’s expected to do the job. I don’t abuse them, and they don’t abuse their salaried position. My employees are seeing [the switch to hourly] as a demotion.

Find out more about the human consequences of this regulation in The Daily Signal.

Do you think the government should force companies to treat salaried workers like hourly employees?

Comments (44)

Mark W Morton, DVM - June 23, 2016

I think the government has no business at all meddling in how a private business conducts business with its employees. The free market – if there was such – would determine wages and “benefits.”

loretta jeglinski - June 23, 2016

The amount now needed to not pay overtime is way out of line with actual salaries for a lot of small companies. If they wanted to raise it they should have taken an average of wages for the whole country, not just the states where salaries are much higher.

Robert Patterson - June 23, 2016

NO !!!!

Maurine Perry - June 23, 2016

More government interference with free market. Typical Obama move to fundamentally transform (destroy) America.

Ken Chmielowiec - June 23, 2016

The sooner the better our country will be when we get on the Republican track again. I do mean a republican such as Donald Trump.
Pray for our country to survive and be a shining light for the world again.
Enough of this political blindness spread by Obama and his hopes that the USA fails. We are strong and freedom will prevail for all again.

RG Schmidt - June 23, 2016

Do I support government should force employers to treat salaried workers like hourly employees? No. What I do support is government getting its nose out of the business of private companies.

Ron Dillon - June 23, 2016

No, for the most part the D-party has no understanding of the damage it does to the USA with regulation that make no sense.
The R-party does not seem to have the leadership or desire to do what should be done when bad legislation is developed.

Henry Williamson - June 23, 2016

The difference between an hourly worker and one who is salaried, is primarily mindset, not time-set. The salaried employee leaves when the job is done: the hourly worker leaves when his time is done. If they both shared the mindset of company success, there would be greater productivity plus greater employee relations.

Debra Moore - June 23, 2016

The government should stay out of the business of businesses!! It’s none of their business. That’s not what the government was created to do!

B Gagliano - June 23, 2016

Much too much interference by government. There is no reason for them to be involved. We have a minimum wage and that should be the extent of their involvement.

Jack M - June 23, 2016

Like many good intentions, this got out of hand. I see many salaried workers putting in 50 plus hours and not getting any rewards. Something does need to be done but the administration did not do what was best for the worker or management.

Stuart Habib - June 23, 2016

Limited government is the key to freedom and safety. The more power we give government the more dangerous it becomes. Let us never forget that!!

Bruce J. Vickers - June 23, 2016

Not No but HELL NO! Obama has overstepped his bounds again. We have to elect Trump to stop this silliness. The feds think they own this country and we have to stop them NOW!

Francis Jones - June 23, 2016

Absolutely not. A salaried position has been one of prestige and a sign that the employee accepts the responsibility of doing a good job with minimum supervision. It encouraged the something extra that changes an adequate performance to a star performance delivered with self pride.

Edith Daniels - June 23, 2016

No.

William Coates - June 23, 2016

That is none of the government’s business. Too bad the Constitution does not include a death penalty for violating it.

Charles Brown - June 23, 2016

I think the government has no business at all meddling in how a private business conducts business with its employees. The free market – if there was such – would determine wages and “benefits.”

Patricia - June 23, 2016

This administration can’t even run the nation with good judgment, so why would we feel they could do a better job of running someone else’s business that is doing well or better than the nation?

Robert McWain - June 23, 2016

If they are treated like hourly,they might as well be hourly.

Jerry Metcalf - June 23, 2016

NO

K jones - June 23, 2016

No! It’s ludicrous to think the government can or should have any say in businesses salaried employees concerning overtime. If an employee is unhappy with their wages the negotiate and or find another job. Its called a free market and it tends to take care of itself if and when you have good hard working employees.

Retta - June 23, 2016

No, the government should not be involved in what a private company does about paying its employees.

Shirley Jones - June 23, 2016

The government should not micromanage
everything!

EDWARD J MCCARTHY - June 23, 2016

I don’t think the government should have any say, in a debate about a companies use of their employees. I had this discussion before. These so called government people have never worked. How would you know about workplace prototypical Mr.Hussein Obama.

keith jones - June 23, 2016

Govermment should absolutely stay out of
wage comtrol

Sharon A Smith - June 23, 2016

Absolutely NOT! It’s obvious non of these ignoramuses have ever had to meet a payroll to keep a business going. The government has no business whatsoever telling a business what to pay an employee or a manager or a contractor. Where do they think that authority comes from? There is compensation other than a wage or salary as well and some workers want to make the decision themselves what is best for them. The government ties the hands of the company and can’t allow the worker to do what would work best for the worker.

Helen Payne - June 23, 2016

The federal government should BUTT OUT of employers’ business.

Monica Hays - June 23, 2016

Does this also apply to salaried government employees like teachers? The school system seems to expect about 12-16 hours per day but claims we are salaried so the hours don’t count. However if you have a family emergency and arrive 15 minutes late, your salary is docked. What about all the time spent on homework and grading papers? It seems government doesn’t follow its own rules when it is not convenient!

AndyX Anderson - June 24, 2016

Government should stay out of the economy as much as possible. I base this on a lifetime of experience in business, both hourly and salaried.
I also base this on history — and on theory such as “Economics in One Lesson” by Henry Hazlett, “The Law” by F. Bastiat, and “Human Action” and “The Theory of Money and Credit” by von Mises. And, yes, I’ve read as much as I can stomach by John Maynard Keynes.
When will humanity ever learn?!

Don - June 24, 2016

With 1/3 plus or minus of people able to work but not even looking for work, and not counted as unemployed, the only solution is to cut out food stamps, welfare, rent subsidies, all subsidies, obama phones, etc., and force all the freeloaders to go to work at all those jobs obama is bringing in illegal aliens to (supposedly) fill.

Joanne S. Beckman - June 24, 2016

No. Stop the “one size fits all” regulatory tsunami that is hitting small businesses! The administration and DOL have no idea what a mess they are making with all the regulations and interference. Vote the Democrats out, please, or the economy will get even worse!

Bob Giargiari - June 24, 2016

Absolutely NOT!

Linda Balulis - June 24, 2016

A RESOUNDING NO!!!!!

Mrs. Phyllis Eix - June 24, 2016

The government should let the free
enterprise principles manage the way businesses set their employee policies, and stop regulating everything we do.

Victor Peetoom - June 24, 2016

No, this is just another “big brother knows best” move.

RONNIE LEDBETTER - June 24, 2016

NO !!!!!!

Scott Brooks - June 25, 2016

Whenever you have governments trying to level the playing field through approaches of equal pay- equal status, sustainable wadges and draconian mandates, you are on the cusp of the old soviet central planning scheme. The working situation of one company are not equal to the next. Governments can’t guarantee or promote fairness, it can only promote the best conditions of opportunity for equal access to employment, etc.

MARY GRAF - June 25, 2016

THE GOVERNMENT HAS NO BUSINESS INTERFERING WITH THE WAY AMERICAN PEOPLE RUN THEIR COMPANIES.

Henry C. Holder - June 25, 2016

No, our system works. The change by the Feds is stupid.

David Lopez - June 25, 2016

NO- that is why they are salaried- Obama should stay out of it

Allison Webb - June 25, 2016

By forcing employers to pay salaried workers overtime, it will, sooner than later, decrease the ability of a company to expand their businesses and hire new workers, down the road. As a negative side effect, long time salaried employees will be the first to be let go, followed by other non-salaried employees, in order to lower the company’s overhead costs.
This, unavoidably, will lead to larger work loads on those fewer employees remaining in the company, cause higher stress levels and higher expectations on employees to complete higher work productivity levels, in the same amount of time, with fewer resources.
I do believe that this is another one of the ” by design” moves enacted by this current administration as a way to further destroy the private sector industries, forcing people to become more and more dependent upon the federal government.

R A Fisher - June 26, 2016

NO!!! Big mistake letting gov’t stick their nose. Too much gov’t already.

Ron W. Smith - June 26, 2016

There is no way to assure the success of policies regarding minimum wage and overtime pay without ALL employers participating and agreeing that a nostalgia for slavery is not the way to fairness for everyone. Making under-rewarded workers compliant,insecure, and voiceless in their own welfare is the sure way to social upheaval. Sadly, that’s exactly the direction we’ve been heading for decades in the U.S., the free market gradually expanding the have/have not chasm.

It’s time for better thinking in our political parties and among those who supply the intellectual firepower in support.

William M Snedden - July 4, 2016

The Federal Government can not handle its own business! Therefore, they should NOT try to handle other people’s business. The free market will handle itself. Salaried personnel will find a new job if the pay scale is not what they need.

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