During his last State of the Union Address, President Obama declared that “America needs a raise.” Yesterday, he acted on those words. The president announced that salaried employees (5 million Americans) making as much as $50,400 would be eligible for overtime. As Laura Clawson of Daily Kos puts it, employers will no longer be able to use exempt status (salaried employees) to keep from paying overtime. This move by the Obama Administration (if it’s not overturned by a court challenge) will either give employees more money or more time off. The 40 hour week will again become meaningful to millions of Americans. It’s a good day for working people.
P.S. President Obama is featured in The Huffington Post on his overtime reform. The president express great confidence that he is doing the right thing for American workers: "That's how America should do business. In this country, a hard day's work deserves a fair day's pay. That's at the heart of what it means to be middle class in America." I agree, but would add that what the president is doing will also help the working class and the working poor, who are often victims of wage theft. We all deserve a fair day's pay.
Huffington Post reports that 9 Senate Democrats are proposing to expand the guidelines for what workers will receive overtime for working more than 40 hours in a week. A bill proposed by retiring Senator Tom Harkin of Iowa would raise the very low threshold used to make employees exempt (not eligible for overtime). The current limit is $455 per week (about $22,000 annual). The Democrats would phase in increases that would raise the limit to $1,090 per week (about $54,000 annual).
This is a great proposal because it would be an immediate improvement for those making more than the minimum wage, and it would eventually even help the middle class. Critics will say that employers will just cut hours and make more positions part-time. The problem with that claim is that many companies who have tried to do this are getting what they pay for: bad work from employees who will leave the first chance they get. Given the current political climate, this bill – like the minimum wage – has almost no chance of passing. What it does do is change the conversation. Democrats are trying to find ways to help the middle class. Hopefully, some Republicans will join with them and do the right thing for hard working Americans.
Huffington Post offers an interesting blog post from Dharmesh Shah, the CTO of of HubSpot. Shah says “you should never leave work on time.” His point is that many people work at jobs that are boring and make them watch the clock. I agree with him that a good job should be part of our life, that we should stay at work sometimes to meet a late deadline or to help a co-worker.
However, I think this good advice can have a negative side as well. Many people I know never leave work at their schedule time. Their schedule is open-ended. They take work home and come to the office on the weekends. Even if they love their job, there is too much work because many companies have come to think that the secret to productivity is under staffing.
Life needs balance. Too often now, the balance is weighted in favor of the employer. A writer I greatly admire, Seth Godin, has said things similar to Shah. As an entrepreneur, I agree with them. I frequently work late and often am in the office seven days a week. However, that is my choice. For many employees, the company they work for asks for more and more. In these cases, I strongly disagree with Shah. Too many people are carrying their jobs home in a way that destroys lives and family. Employers and employees both need to recognize that work is part of life, but not all of it. There is a time to leave work and start living.
Think Progress reports on Treehouse, an online education company that only works 4 days a week. Company founder Ryan Carson was working 7 days a week on a new start up. He made a decision that life was as important as work and instituted a 4 day work schedule for all employees. Treehouse is one of Carson’s 3 companies that follow the 4 day work week model. Some experts think this kind of work model improves performance while working more (60 hour weeks) hurts productivity. Time will tell if more companies follow Carson’s model – if he can even sustain it with his companies. The first step is to try. Three cheers to Ryan Carson for remembering that life is not all work.
Common Dreams has posted an article by the great labor writer Michelle Chen, who examines the growing practice of “on call” work schedules. In this labor model, the employee works only when the employer offers hours. There is no set schedule. As Chen notes, there are several disadvantages to this model: no set schedule, getting sent home early, being called in the same day to work, and having no control over free time since you can only work when it is available. This model is becoming more common in retail stores and restaurants, industries where the minimum wage or tip wages are often the norm.
Chen ends her article: “While it purports to optimize workplace efficiency, the Just-in-Time system exploits work-time as a commodity. A just schedule takes into account the true value of a worker’s time, on and off the clock, and it’s the only way to truly ensure a fair day’s pay.” True words. But in a world where so many working people have bought into the argument that business is always right, I’m afraid that on call schedules are going to be just one line on a long and growing list of workplace concerns that workers are going to have to fight to change.
I returned to my office today after taking a three day weekend. One of my clients called to say that he had sent me a file. Then he added, “I hope you have time to look at it while you’re on your trip.” One of my friends accompanying me was asked by his boss to have a project done by Sunday night even though the soonest the boss would look at the report would be Tuesday.
What’s going on here? People in general are losing a sense of when we are on and off the clock. In the days when most people punched a clock, employers respected workers’ time for one simple reason: overtime. Now, when many people work on salary and technology lets us work remotely, employers and clients often feel that work can be done anywhere and anytime. Many of my clients who have flexible “work from home” schedules also end up putting in the most hours each week.
What can we do about this? On an individual level, not much. As a culture, we need to remember the value of time off. My Sunday feature for this blog is based on Wendell Berry’s Sabbath poems. Berry reminds us that a good life needs time off to refocus and recharge our batteries. We need to remember that and, as a group, we need to ask our employers to do the same. Life can’t be all work all the time.
I read an interesting article today about local companies that offer “summer schedules.” These enlightened employers let employees to work longer days between Monday and Thursday in order to take off all or part of Friday, which lets the employee have a longer weekend during the summer. That truly is a benefit. However, not many companies offer it, especially if the type of work being done is blue collar or low wage.
There’s a different kind of flexible work that is becoming popular: contingent labor. Employers want the ability to increase or decrease staffing quickly without taking on the burden of full time employees. Employment services or outsourced work firms hire staff on a contingent, and then “fill orders” with the employer who needs flexibility. From the employer’s point of view, this system works great. The employee has a different perspective.
Under a contingent system, there is no guaranteed number of hours (and usually no benefits). There is also no set schedule. When there is work, the employee has to work if she wants to get paid. Some employers market these jobs as having a flexible schedule. The problem with this claim is that it is one way. Contingent work models make no commitment to the employee. In fact, they are modeled in a way to make each employee immediately replaceable, a cog in the machine.
I once managed a contingent workforce. In hiring new staff, I underscored what the job entailed and what it could not promise. For people with full time jobs or other sources of income, a contingent work model real can offer flexibility and a little extra cash. The problem is that more and more jobs that were full time are now becoming contingent. Jobs in manufacturing, assembly, distribution were once good jobs that gave employees a secure 40 hours a week and insurance. Many companies are now using a lean full time staff and supplementing with outsourced, contingent labor.
Again, if we are solely looking at this trend from the employer’s perspective, it’s a winner. Labor costs are reduced and all of the hassle of HR administration is borne by the temporary service or outsourced firm. The employee now has to bear the burden of finding enough hours to pay bills along with the insecurity of having no medical insurance. Where summer work schedules discussed above are an example of an employer being flexible, the employee must be flexible in the contingent model, ready to scramble when the phone rings.
As Michael Harrington wrote in The Other American, the working poor in the U.S. are often invisible. We take their labor for granted and train our consciences not to care about what they are paid. The problem is that the number of people in bad jobs – low wage or contingent – is growing. With no sense of security and little income, they buy only what is needed, which explain why “dollar stores” are booming. The entire economy will suffer as this trend continues. As a country, we need to wake up.
One of my good friends is an engineer. For most of his career, his employer paid overtime to engineers who worked more than 40 hours. That changed three years ago. Now they are on a “comp time” model in which non-hourly employees are supposed to be able to take time off for working over 40 hours in a week. However, given “lean” staffing, it’s impossible to use comp time.
Laura Clawson of Daily Kos discusses this problem and how the freedom-loving conservatives in Congress are trying to make it worse. The Working Families Flexibility Act, a proposed bill in the House of Representatives, would enable employers to control their employees' time, working them hard during busy seasons,making them take comp time without pay when production is slow.
Clawson calls out Eric Cantor as the leading supporter of this “reform.” That’s not surprising. The real challenge will be to see how many Senate Democrats fall in line if the bill passes the House. Working people need to come together to support each other on this issue. The Working Families Flexibility Act should be a rallying point. Anyone (hourly or salary) working more than 40 hour should be paid overtime. Keep it simple: +40 = overtime pay.
When reporters and commentators talk about the economy, they focus on unemployment. More sophisticated experts discuss falling wages and the loss of consumer buying power. Those are both very important topics. But there is another economic measure that impacts how we work and live: Productivity.
Whenever productivity is discussed, it is taken as a measure of the economy. It’s easy to assume that more productivity is a good thing. However, we also need to ask who benefits from productivity and who loses. As I said, salaries are flat, many benefits have been cut. Fewer people are doing more work. Who wins that game? Investors and company owners who get bonuses for productivity. Who loses? The people who are doing more work for the same or less compensation.
Every week clients tell me new stories about how they have been being asked to do more, to work late into the evening, to take work home. Across industries, workers feel stress and overburdened. At the same time, they are afraid to confront their managers because they need their job and the income it provides. We can measure an unemployment rate and productivity. It’s much harder to measure what people are feeling and how their jobs affect their lives. The next time you hear an economist gushing about increased productivity, remember that workers are paying the price, working more, leading less productive personal lives. They are not the winners in the productivity game.