The Obama administration is changing overtime rules for some salaried workers. Employers across Wisconsin say they're preparing to feel the pain the changes will cause. Many still have questions about how they'll comply with the rules.
Currently you're not eligible for overtime pay if your salary is $23,660 or more. Any hours worked beyond 40 are considered part of the job. But the Obama administration finalized the new rules Wednesday. They take effect in December. The rules require employers to pay overtime to salaried employees who make less than $47,476.
Vice President Joe Biden promoted the rules in a stop in Ohio on Wednesday. "The vast majority of the American people, they're not looking for a handout. They're not looking for a guarantees. They're just saying, 'hey man, give me a shot, pay me what I'm worth,'" he said.
"This is the most misguided, uninformed, callous rule that the President has delivered in his eight years in office."
While Biden frames the issue as one of fairness, critics say the president's order is anything but reasonable. They complain the administration expects them to come up with millions of dollars to boost workers' pay -- without adequate justification.
Brandon Scholz of the Wisconsin Grocers Associationdoesn't mince words. "This is the most misguided, uninformed, callous rule that the President has delivered in his eight years in office," he says.
Scholz says grocery stores have small profit margins. So he says they can't afford to pay overtime to the salaried employees the new rules affect. He thinks stores will have to restructure by eliminating salaried, managerial positions and shifting their duties to hourly employees. Scholz says it will be tough to get that done, before the rules take effect.
"Grocery stores typically employ somewhere between 50 and 250 employees, so if you're one store and you have 175 employees, can you figure it out by Dec. 1? Maybe, maybe not. But what if you got 12 stores and you have thousands of employees in different locations? I mean, this is a nightmare," he says.
Employers will have to wrestle with more than their structure, according to Chris Reader of Wisconsin Manufacturers and Commerce. He says they'll also have to figure out the mechanics involved in complying with the new rules. Reader asks: "Will they require some sort of a new time keeping system? For instance, if you have an individual who currently is salaried and who is going to be hourly now with this new rule and if that individual routinely might answer a couple of emails at home, or if they're a sales representative and maybe they strike up a conversation on a Saturday while they're on the golf course and it ends up turning into a work discussion, how do they track that time?"
And it's not just not for-profit firms that may have to put new policies in place.
Alex Hummel of the UW System says it has about 8,000 salaried employees who now will have to be compensated for overtime work. He says the system does not yet know what steps it will take to comply with the rules.
"We're going to need to do some job-specific analyses to really determine which incumbent employees will earn overtime play, how much they're going to earn. So we really need to spend these next several months further understanding the scope of it," Hummel says.
The new federal rules also affect tens of thousands of additional public workers, including those in local government. So counties and municipalities are tasked with determining their next steps.
Meanwhile, opponents say they're not going down without a fight. They're lobbying members of Congress to reject Obama's rules -- or, at least, alter them, to give employers more time to adapt to the big changes.
