Here's my question for the Obama Administration and its Dept. of Labor - Do you have any concept of what it takes for a small fledgling company in a sluggish economy to keep its doors open?

Obama’s Overtime Chimera

Incomes have barely budged during the Obama Presidency, but an election is coming so the White House has found a way to conjure raises another way: simply declare them, via the week’s rule mandating that employers pay overtime to millions of more workers. As usual, this mandate will hurt more workers than it helps.

The Labor Department’s overtime rule roughly doubles the weekly threshold for salaried workers exempt from overtime pay under the Federal Labor Standards Act to $913 a week ($47,476 a year). Employers will have to compute the hourly wage rate of salaried employees earning less than $913 a week and pay them time and a half if they work more than 40 hours a week.

The White House says the higher threshold will quintuple the share of salaried workers who qualify for overtime to 35%, but few will likely see a raise. Most small businesses don’t have piles of cash lying around, so they will redistribute the money they have available for employee salaries. The National Federation of Independent Business notes that the Labor Department’s analysis even forecasts that the average pay rate of a newly covered salaried worker will decline by about 5.3% in 2017.

Some employers will bump up the salaries of workers who earn just below the threshold to avoid the mandate. But in return these workers may receive fewer benefits and bonuses, only 10% of which count toward the threshold.

A National Retail Federation study estimates that the rule will cause employers to shift about a third of salaried retail and restaurant workers to hourly status. One in 10 salaried employees—including many managers—will see their hours reduced. Some employers will hire more temps and part-time workers. And Democrats complain about the uncertainty of the “gig” economy?

Vice President Joe Biden all but conceded this point this week by suggesting that workers would benefit if their hours are scaled back since they would have more time with family. The Obama Administration used a similar argument to defend the ObamaCare means-tested subsidies. Most salaried workers would prefer the extra pay, thank you very much. The irony is that salaried workers will enjoy less personal flexibility once they have to record their hours, and those who become hourly wage hands will receive even less.

Meantime, businesses will have to divert money from wages or investment to redesign their compensation plans, implement timekeeping systems and educate workers on how to track their hours. Many local governments and nonprofits opposed the rule because of these costs.

The rule also includes an indexing formula that automatically increases the threshold every three years pegged to the earnings level of the 40th percentile of full-time salary workers in the lowest wage Census region (the South). However, the Federal Labor Standards Act does not allow for automatic indexing without new rule making, so the Labor Department is defying the law.

The Obama Administration is rushing this rule and others out now because it hopes to get out ahead of the 60-legislative day provision in the Congressional Review Act. Once a new rule is made final, the Congressional Review Act gives Congress 60 legislative days to vote to overturn the rule with a simple majority, not subject to the filibuster. Mr. Obama doesn’t want Congress to be able to see who the next President is. He wants to avoid the fate of Bill Clinton ’s ergonomics rule, which was overturned by Congress in the first days of the George W. Bush Administration.

Expect Democrats to run on their “middle-class raise” this fall while bludgeoning Republicans who oppose the overtime rule. You can bet labor unions will also amplify their campaign for a $15 minimum wage. But if President Obama could mandate a wage increase, voters should ask why they’ve had to wait seven years for one.