New U.S. work and wage rules Wednesday
New labor rules pushing employers to pay overtime to all workers making under $47,500 (instead of calling them "exempt" managers, professionals, or even outside contractors), are expected in final form from Vice President Biden and Labor Secretary Thomas Perez when they visit Ohio on Wednesday, ten months after President Obama proposed them as a way to boost U.S. worker pay.
* * *
Christopher Mayer, partner at the Newark, N.J.-based law firm McCarter and English, calls the rules "big news," part of Obama's broader plan to use U.S. Labor Department rules and enforcement to increase net pay and wage levels. Companies will have to track workers' hours more closely to make sure they comply.
Mayer says DoL and the Internal Revenue Service have also stepped up investigations of independent contracting arrangements. "Contractor misclassification" costs state and U.S. treasuries a lot of money, he told me. "If the Department of Labor and the IRS determine that an independent contractor is really an employee, they may become subject to to the Fair Labor Standards Act" and the stricter new overtime rules.
Companies like Comcast, with its thousands of contract workers, could be affected on multiple levels. Not just installers -- some layers of Comcast managers at call centers and other teams and groups -- may come under the rules, Mayer said.
Information technology consulting firms will have to similarly review and, maybe, reclassify many service people as fulltime employees with overtime rights, Mayer added. That could mean big changes for the fiscal calculation on whether to provide services in-house or through outside companies.
The rule could have its biggest impact on low-wage Southern and Midwestern markets, Mayer added, and among retail, warehouse, hotel and hospitality, branch banking and nonprofit employers who typically pay low wages.
* * *