It was going to be awesome.
That’s how one manager recently described the impact of the new overtime rules that were supposed to go into effect this past week. The manager was Mr. Harold Franklin, who heads up the compliance department at a local manufacturer. Mr. Franklin said the new rules were going to be a game-changer at his organization.
For readers that may not be familiar, the new overtime rules proposed by the Department of Labor would have instantly transformed millions of currently salaried positions into hourly jobs which paid time and a half whenever an employee worked more than 40 hours in a week. The rules achieved this result by basically doubling the annual income threshold under which employees must be paid overtime. Unfortunately, the implementation of these rules was delayed by a rogue federal judge from Texas who declared a nationwide injunction on the rules, until existing lawsuits about the changes were addressed. In making this preliminary decision, the judge argued that Congress was supposed to make and change labor laws rather than the Executive Branch–a view that has been widely discredited by the academic community. With any luck, future courts will choose workers over the antiquated Constitution and the rules will go into effect as planned.
For Mr. Franklin and his company, that day can’t come soon enough. In particular, he was looking forward to the increased control he could exercise over his team members.
Mr. Franklin explained that he likes to “run a tight ship”, and having all his employees on salary has been getting in the way of that objective.
“It’s almost like they want to have a life outside of this place,” he explained. On multiple occasions this year, different employees had decided to leave work for “an hour or two” during the work day to attend a child’s soccer game, meet up with a friend for coffee, or attend a doctor’s appointment. Apparently, some of the boldest employees had even decided to start working from home. This kind of behavior is common for salaried employees, who typically enjoy more flexibility than their hourly peers. However, Mr. Franklin grew enraged at the suggestion that this behavior is normal.
“It’s damn near insubordination!” Mr. Franklin exclaimed in our conversation, visibly angry from recalling the shenanigans of his demanding employees. When asked, Mr. Franklin conceded that they still got their work done on time and even worked late when deadlines required it. But to him, it wasn’t about that–“It’s about respect. These people [the employees] want to be treated as equals and they’re not. I’m their leader and they are my soldiers. End of story.”
It turns out the employees themselves see Mr. Franklin a bit differently. Granted anonymity to speak candidly about their boss, staff members described Mr. Franklin variously as “horrible”, “annoying”, “overbearing”, and “probably one of the worst human beings I’ve ever met”.
But whether Mr. Franklin really is the micro-managing nuisance that his employees imply, or simply “detail-oriented” as he claims, it’s clear that the new overtime provisions would have changed the dynamic considerably.
Personal cell phones were going to be confiscated and stored at the reception desk during working hours to cut down on non-work communication. The company had purchased new software to monitor staff activity and Internet browsing and provide detailed reports on how much time employees wasted. Mr. Franklin had even proposed installing technology that would monitor the duration of employee bathroom breaks–though his company’s “old school” executives quickly squashed that proposal.
Mr. Franklin explained that if and when the rules get implemented, time will be money. Previously, his intrusive ideas could never see the light of day–the company had no reason to track or care how the salaried employees spent their time as long as they got their tasks finished. But if most of those same employees become hourly because the overtime rules get through, Mr. Franklin’s innovations could become invaluable to the company. Telecommuting–long a bane of Mr. Franklin’s existence–would also become a thing of the past at the company, much to his delight.
But the hypothetical benefits don’t end there. Mr. Franklin also planned to seize on the new overtime rules as an excuse to let go some of his least efficient employees. He told The Daily Face Palm that “salaries had been an excuse for incompetence for far too long”. Here, he was referring to several employees in his department who performed the same quality of work as the others, but they were less experienced and qualified and a bit slower as a result. Right now, they are compensated for their deficiency by working a little later than the others. But the new overtime rules will make such behaviors too expensive to continue, and Mr. Franklin will finally have an excuse to fire them.
Asked why he prefers this outcome, given that the quality of the work didn’t suffer, Mr. Franklin explained that his department aspired to be an elite department in the organization. He only wants to employ the best and the brightest. And much like increasing the minimum wage, the new overtime rules would go a long ways towards ensuring those are the only people businesses can afford to hire. Needless to say, Mr. Franklin was thrilled by this possibility.
Not only would it improve the caliber of personnel in his department, he thought it was the most just outcome for society as well: “Everyone knows the odds are stacked against people that are brilliant and well-educated–they always have to compete against people who are utterly beneath them. Thanks to President Obama, hopefully that will finally be a thing of the past.”
*The individual quoted in this piece is fictional. Any similarities between his expressed positions and those of public figures or people you have actually worked with are entirely coincidental.