Writing checks for overtime (or sending managers home before they reach the point of being entitled to it) is only the more visible cost to business of the Obama administration’s scheme to reclassify layers of junior management as hourly employees. Small businesses told the Wall Street Journal this spring (summarized) of the forbidding morale cost of discouraging ambitious employees from upwardly mobile, which usually means salary-oriented, thinking:
Emo Pentermann, owner of Bell ATM Service Inc., a distribution and repair shop for ATMs and other money machines in Centennial, Colo. …worries that making more people eligible for overtime pay could remove the inherent incentive for lower-level managers to hustle to earn a promotion.
“You work hard, develop the maturity for a salaried position, and then move up,” he says. “It takes away that whole level of maturity and freedom of choosing to get the job done in the time allotted. So for all practical purposes, they just might as well be on a time card.”
Jeffrey Harris has 70 salaried employees at his Chicago-based Inte Q, a marketing firm that specializes in customer-loyalty programs for brands such as Reebok and Office Depot. … He has tried to create a workplace environment that de-emphasizes keeping up with a time clock. For instance, employees can take time off work to attend a child’s performance in school….
…when he heard about the proposal, he said he immediately thought it would affect the type of work culture that has yielded results for him in both profits and employee retention. Only 2% of workers have voluntarily chosen to leave the company in the past three years, he says.
Whole piece here, and earlier on the manager-overtime scheme here and here.
P.S. Proposed regulations anticipated by November 2014, final regulations “unlikely to arrive until Spring 2015″ [Wage and Hour Insights]
To the now-famous Obama “pen and phone” formula for circumventing Congress to change the law through executive fiat, columnist Debra Saunders suggests adding “…and teleprompter,” since blaming the opposition seems to be an integral part of the tactic. The President’s flippant, confrontational “so sue me” remark illustrates the problem: even when the executive decrees are not at war with the rule of law, as they often are, they often breach the spirit of comity between the branches.
As Saunders notes in quoting me, there are areas where I find some of the administration’s underlying policy objectives to be sympathetic or understandable — for example, in the effort to adjust banking regulation to accommodate legal marijuana commerce in Washington and Colorado. But “understandably motivated” does not equal “lawful.” On top of all that, many of the executive initiatives, typified by those on labor issues, are truly horrible as policy.
None of which is to endorse proposals to head off the problem by having Congress sue the President. Those will often collide with the Framers’ contemplated role of the courts as adjudicating true cases or controversies arising between parties, not umpiring every power dispute between the other two branches (plus: follow-up Saunders blog post).
Obama urged to raise taxes unilaterally on disfavored groups by regulation if Congress won’t act:
Out of deference to Congress, the Treasury Department has traditionally avoided making policy in areas where the legislative branch may act. “But when the legislative process is as broken as it has become today,” said Daniel N. Shaviro, a law professor at New York University, “it’s simply inevitable that administrations will care less about such comity, and be more willing to advance their policy views in controversial areas through the unilateral exercise of regulatory authority.”
That’s the ticket. We’ll call it “simply inevitable”! [Victor Fleischer, NYT "DealBook" via TaxProf; earlier on pen-and-phone executive orders here, etc.]
All sitting Presidents try to press the power of their office into doubtful areas. President Barack Obama has been particularly aggressive about doing so, according to the panelists at a May 21 discussion held at the Cato Institute. Georgetown law professor and Cato fellow Nicholas Quinn Rosenkranz noted that the Constitution’s Take Care Clause directs the President to take care that the laws are faithfully executed, and descends directly from centuries of struggle against the “dispensing power” claimed by pre-modern English kings — that is, the power to dispense with enacted legislation entirely where the royal will is better served that way, a claim of power that goes beyond simple prosecutorial discretion or the pardon power.
Rosenkranz pointed to a number of Obama executive actions that are hard to reconcile with the Take Care clause. The text of the Affordable Care Act, for example, states that the employer mandate prescribed by the law was to begin Jan. 1, 2014. “You don’t need a lawyer to interpret this, you need a calendar.” Yet President Obama elected unilaterally to delay the mandate and substitute a later effective date of his own choice. Likewise, the President’s suspension of some immigration regulations overrode the clear letter of U.S. law, aside from any pluses or minuses it may have had as a policy matter.
“President Obama is being the kind of President Nixon wanted to be,” said panelist Jonathan Turley, a well-known legal commentator and law professor at George Washington University: “Many Democrats will rue the day they stood by while the President asserted these kinds of powers.” Panelist Andrew Grossman of Cato said future presidents are likely to follow Obama’s lead and assert their own right to suspend the operation of other laws.
Bonus: At a separate event, Cato welcomed George Mason U. law professor Frank Buckley to talk about his book The Once and Future King: The Rise of Crown Government in America. I offer a question at the beginning of the comment period.
Here comes a more regimented, polarized, lawsuit-ridden workplace with less upward mobility — at least if the President gets his way. I deplore some of the likely effects, unintended or otherwise, in a new Cato post: “Increasingly, Obama’s binge of executive orders and unilateral decrees to bypass Congress is coming to resemble a toddler’s destructive tantrum.” More: Daniel Schwartz, Daniel Fisher. Our wage and hour law category has more than 80 posts.
More from Scott Shackford, Reason, from Brett Logiurato at Business Insider on organized business opposition, and from the WSJ. And from George Leef, John Locke Institute:
The Fair Labor Standards Act is the federal statute that imposes the minimum wage along with other intrusions into what ought to be matters of contract between the parties.There is no real constitutional authority for the federal government to dictate the terms of labor contracts. During the New Deal, Congress relied upon the notion that if anything might have any possible effect on interstate commerce, then it’s fair game for federal control. That idea stretches the concept of interstate commerce far beyond its intended meaning.
Yet more: Welcome Andrew Sullivan, Washington Times readers. And see followup post (why this could do much more damage to economy than minimum wage hike)
Update: I’m in this Cato video, my brief contribution on the president’s executive order powers beginning around the 2:15 mark:
I tweeted and liveblogged the State of the Union address last night so you wouldn’t have to watch. Here are Twitter highlights, in regular rather than reverse chronological order:
Good sleuthing by Carter at Point of Law and ShopFloor: President Obama the other day issued a much-noted new executive order expanding the legal powers of labor unions. When you check the metadata on the PDF, who do you think turns up as the document’s original author?