Lawmakers push for OT pay protections; some say it could harm OH

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Democrat state representatives Brigid Kelly and Kent Smith want the state to adopt a measure that would force employers to pay some employees that make up to $47,476 overtime.

Currently, some people who make more than $23,660 (or $11.375 per hour) are not guaranteed to be paid for your overtime.

That’s based on a decision at the federal level, and it should be noted that $23,660 is below the poverty line for a family of four.

Yes, a sole bread-winner bringing home less than $12 dollars per hour would be below the poverty line if they were raising three children alone; or had two children and a spouse who could not work or earned less than $5,000 per year.

So let’s use the example of a single mother trying to raise kids on a salary of $24,960 ($12 per hour).

She is a manager at a retail store that has to work 55 hours per week because of her managerial duties and as a result, receives no overtime compensation because she makes too much money by just over $1,000 a year.

If the state were to adopt the changes the U.S. Department of Labor was ready to honor, and increase the overtime protection to $47,476, she would bring home an extra $14,040 in taxable income she earned over the course of a year; which is an additional $270 gross per week.

Hannah Halbert, a researcher at Policy Matters Ohio says this is an example of why the current system needs to be updated; and she says it was going to be until the Trump administration shut it down.

In 2016 the Department of Labor came to the conclusion that the protection level should be raised to $47,476 which is the average of what 40% of people living in the south, the lowest income area of the country, make according to Halbert.

This would not have brought the overtime protection level up to what it would have been if the government had kept it in line with inflation; that would have put it into the $50,000+ range, but it was a start.

In 2017, however, Halbert says the Trump administration took steps to block the increase in protection level from going into effect. Halbert says, 12.5 million workers missed out on overtime pay as a result.

In Ohio, 351,000 workers ended up not getting the protection.

Representatives Kelly and Kent want the state to step up and protect workers overtime at the rate the Department of Labor was ready to.

“This is huge to the families that are working 40-50-60 hours a week and still living in poverty,” said Halbert. “This will have a ripple effect across Ohio’s entire economy.”

However, what those ripples will do besides helping the roughly 3.5% of Ohio workers remains a mystery.

The Buckeye Institute thinks they could potentially have a negative effect on Ohio.

“It’s well-intentioned,” said Greg Lawson of the Buckeye Institute. “Everybody wants people to get paid fairly; there is no doubt about that. The problem becomes; you cannot just make it happen.”

Lawson says the reality of the situation is more nuanced.

“You’re not going to magically wave a wand and get employers to just take this,” said Lawson. “They’re going to find ways to modify it.”

Let’s go back to the example of the single mom working as a manager. According to Lawson, the business may simply re-classify her position.

They could strip away the manager title and turn her from a salaried employee into an hourly employee at a lower base pay rate. They would still have to pay her overtime, but they end up not paying as much as they could have.

Or, they could automate jobs with artificial intelligence, like kiosks that only require a couple of people around to make sure they don’t break and are functioning correctly. In this instance, sure the mother gets her due, but other employees lose their jobs.

Lawson says this idea of raising the rate so that more people can get access to getting paid for all of the work they put in for a company sounds great, and on its face is really attractive; not to mention the fact he says that everyone should get paid fairly; but he believes there is another way to grow wages.

“We have to be able to create the environment so that we have a plethora of jobs that are available,” said Lawson.

The idea boils down to supply and demand. The supply of jobs is not at a point in some industries where the demand for workers is high enough for employees to use that to their advantage.

For example, if a worker was not getting paid what they feel they should be paid for the number of hours they work, they could negotiate for a better wage and if unsuccessful say, ‘Well then I am going to take myself to a competitor.’

But because there aren’t enough jobs to do that in Ohio, according to Lawson, employees do not have the leverage they need.

He says to get to that point more small businesses need to be started in Ohio; and according to Lawson, Ohio does not have a good track record of making that easy.

According to Lawson an increase in small businesses give workers options, and Lawson says if this bill does go into effect it could have a chilling effect on the creation of those small businesses.

Business creators would be de-incentivized to open up shop in Ohio because the cost of paying for employees may be too high after looking at what it could take to grow the business through re-investment of the meager profits they make. He says it could also mean they may still open up shop but employ fewer people.

Ultimately, it will be up to state lawmakers to decide if this is something they want to tackle in the waning months of the General Assembly.

As legislators enjoy the final days of their two-week Easter break, they prepare for two months of work before taking a nice long summer break.

Much campaigning will be done over the summer months before they all come back in the early fall to deal with a lame-duck session.

With the number of bills far outweighing previous general assemblies and fewer bills passed to this point; some wonder just how willing the GOP-led legislature will be to make this a priority; especially given it was introduced by two Democrats.

Copyright 2020 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.


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