Last year, business owners across Nevada were facing a serious challenge to employee compensation in the form of changes to the overtime rule. As it stands now, overtime is required for any employee working over 40 hours but provides an exemption for executive, administrative or professional employees. The law is part of the Fair Labor Standards Act and the Department of Labor (DOL) is responsible for defining the job duties that are considered executive, administrative or professional employees.
However, changes to that law were issued by the DOL as a response to former President Obama’s directive regarding overtime. Set to go into effect on December first of last year, the new rule would have denied the overtime exemption to any employee that makes less than $47,476 a year, regardless of the duties that employee performs. Clearly a contradiction of the Fair Labor Standards Act, Nevada Attorney General Adam Laxalt joined 21 other states in protesting the new rule prior to it being enacted. Thankfully, they were successful and, at the end of August, the U.S. District Court granted a summary judgment to permanently invalidate the DOL’s rule.
If you’ve read any of my previous commentaries, one thing should be clear, I don’t like government overreach. We should exist in a free market in which business is allowed to thrive and those that don’t take care of their employees have to deal with losing good people. The problem with a rule such as this is that it removes the flexibility business owners have when dealing with their employees.
Employers and employees working together to figure out what works best for them is an important part of any business. In fact, if you’ve ever hired someone before that person began working for you, you sat down with them and had a clear conversation about expectations on both sides of the table. That conversation would have included salary expectations and overtime rules. Having the government step in and tell you what that conversation should look like limits yours and your employee’s options. Even worse, it limits the options needlessly.
I believe the DOL and President Obama intended to protect workers that were being given too many hours and unfairly compensated for those hours. I have to go back, however, and remind you that we live in a free market. Unemployment, currently, is very low and businesses are having a hard time finding qualified employees. If a business owner doesn’t treat their employees fairly, it’s very easy for that employee to simply find someone that will. Having government involved in that process for any reason is both unnecessary and potentially harmful.
The current administration has also announced an intention to revisit the overtime law through new rulemaking and, I hope, will consider the effect on business when government overreach becomes so burdensome as to limit flexibility.
CALL TO ACTION: A big round of kudos is deserved by Attorney General Laxalt for his efforts to keep business in Nevada as free from government intervention as possible. It’s up to us, business owners and decision makers in Nevada, to ensure that our government remains in their designated seat and doesn’t try to put its nose in where it doesn’t belong. Stay vigilant when it comes to government overreach.
2 Chronicles 7:14 (NKJV) “If my people who are called by My name will humble themselves, and pray and seek My face, and turn from their wicked ways, then I will hear from heaven, and will forgive their sin and heal their land.”