Overtime Rule Affects Freedom and Innovation

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Multiple posts on Instapundit, today, expand on the harm of the Obama administration’s mandating expanded requirements for overtime, which I mentioned yesterday.  Walter Olson hits on a key point:

Perhaps most significant, it would force millions of workers into time-clock or hour-tracking arrangements even if they themselves prefer the freedom and perks of salaried status. … Many workers will also lose the option of “comp time” arrangements, often valued as family-friendly, by which extra hours worked one week are offset by a paid day off in the next.

James Sherk fills in more similar details:

The rule will change how employees work. Overtime-eligible salaried employees must carefully log their hours. Each time they respond to a work e-mail, take a work phone call, or do any other work from home, their employer must track and pay them for it. If they do not, they risk getting sued. Trial lawyers filed 8,800 Fair Labor Standards Act lawsuits in 2015, many of them for employers who did not compensate overtime-eligible employees for work done remotely.

In order to avoid lawsuits, many employers deny flexible work arrangements to overtime-eligible employees. Virtually all employers who permit remote work and flexible work arrangements allow overtime-exempt employees to use them.

Apart from the economics that I discussed, yesterday, the act of enforcing such regulations and the necessary calculations that businesses must make have an effect, too.  Even if both the employer and the employee wish to experiment with some new arrangement, the employer has to carefully consider the possibility that they’ll accidentally run afoul of the rules and create vulnerability for a lawsuit.

Ultimately, all innovation is related.  Innovative ways of working create new markets and may open up the possibility of innovative new methods, services, or products, while also freeing up costs in the economy that can be put toward something more desirable.  If you commute to work, would you rather spend your money on gas and your time on traveling, or would something else be of higher value?  The answer is obvious.

One unspoken rule of big government, though, is that society can never be permitted to advance more quickly than unimaginative politicians and insiders can figure out ways to profit from innovations and further entrench their power.



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