Obama's War On Working Women

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Now that the midterm elections are over, the Department of Labor is getting ready to release new proposed rules on overtime pay. These rules will fulfill President Obama's promise to raise the salary level at which employers are required to pay overtime. In March, at the White House, the President said, "Overtime is a pretty simple idea: If you have to work more, you should get paid more."

But this promise contradicts other promises the president has made, most specifically towards working women. The president wants working women to have flexible hours and to be able to telecommute, job characteristics highly valued by working parents. Raising the mandatory overtime ceiling would take away these workers' flexibility.

Currently, any salaried worker making less than $455 per week, or $23,660 a year, has to receive overtime pay. This level was established under Department of Labor regulations in 2004. The Department of Labor is likely to raise that amount to around $965 per week, or about $50,000 a year.

Mr. Obama's new overtime rules would extend overtime rules to several million employees that businesses classify as executive or professional employees. This would prevent employees from taking time off to make up for overtime work, making it more difficult for some women to work.

More pay always sounds good, but not if it comes with strings attached. Without the choice of comp time over overtime pay, workers will not be allowed to take time off in exchange for extra time worked. Plus, since employers will be required to keep careful track of workers' hours to avoid being sued for overtime violations, they might be unwilling to allow them to work from home. This would limit opportunities for telecommuting, highly valued by some working parents.

The White House admits that flexibility is important for women. The home page of the White House Council on Women and Girls contains sections on workplace flexibility, complete with a kit to get started with workplace flexibility in individual communities. The site states, "Flexible workplace arrangements can mean flexibility in terms of when one works, where one works, or how much one works. Flexibility can play a key role in creating effective workplaces and in providing important benefits to employers, employees and the greater community."

An October White House report entitled Eleven Facts About American Families and Work states, "Without workplace flexibility and a supportive work environment, it can be difficult for parents to handle these unexpected child care needs...This problem is even more acute for low-wage workers who are the least likely to have workplace flexibility options and can least afford to take unpaid leave."

I could not agree more. Given the president's support for flexibility, it is even more puzzling that he would support taking away workplace options for lower-paid women through his prospective overtime rule.

Many workers earning over $23,660 are paid salaries that reflect their hours worked. Think of elected officials or university professors, who get salaries but not overtime pay. Some people may prefer overtime pay, but others may prefer more leisure. Flexible work hours are especially important in the Hispanic community for family reasons and to celebrate religious holidays.

Some mothers, particularly those who cannot afford childcare, would prefer time off to extra overtime pay. When overtime hours are allowed to count toward time off instead of pay, women can change their work schedules according to their needs. If a child becomes sick or the babysitter cancels, a female employee with the flexibility of extra hours can simply take time off. Requiring overtime pay legally limits many women from negotiating time off.

The choice of comp time instead of overtime pay is not available to lower-paid employees under the Fair Labor Standards Act. Those who designed the Fair Labor Standards Act in 1938 could not foresee the numbers of women in the workforce, including mothers, or the Internet with its possibilities of telecommuting.

Flexible work hours benefit not just current workers, but also women who are not currently employed but who might find the prospect of comp time an inducement to enter the labor force. Some mothers do not want to enter the workforce because they are unwilling to work long hours.

In some occupations, overtime is required, rather than voluntary, leading to more than 40 hours a week away from home. For these people, the prospect of comp time might make working a full-time job a viable option. With declining female labor force participation, inducements for women to enter the labor force are worth trying.

Rather than decreasing the number of employees who can receive comp time, as the president has proposed, the Working Families Flexibility Act of 2013 would expand it. The bill, which passed the House last year, would allow employers to offer workers who worked more than 40 hours a week a choice of 1.5 hours of comp time per overtime hour worked, rather than overtime pay. The Senate version, sponsored by Sen. Mike Lee (R-Utah), did not make it out of committee in the Democrat-controlled Senate.

The 114th Congress should prevent the Labor Department from raising the wage ceiling on required overtime pay. Instead, it should help women by passing the Working Families Flexibility Act and sending it to the president's desk for his signature.


Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is senior fellow and director of Economics21 at the Manhattan Institute. Follow her on Twitter: @FurchtgottRoth.   

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