Tuesday, May 24, 2016

Do over time rules matter?

Last week, the Huffington Post reported that President Obama is changing the rules around over time in America in a way that will affect millions of workers. In the US, employment is (mostly) federally regulated. Workers who work more than 40 hours a week must be paid time-and-half if their annual salary is below $23,661. The Obama changes raise this threshold to $47,476 and index it to inflation.

The story contains the usual employer concerns about the effect of the change on workers (“oh, think of the workers!”). The movement towards a $15 minimum wage suggests that most of this employer catastrophizing is just economically self-serving propaganda.

The rules around over time in Canada (where employment is mostly provincially regulated) are different. Jurisdictions typically require over time if any worker works more than 40 hour in a week or 8 hours in a day. Some jurisdictions also largely prohibit over time except in emergencies.

The effectiveness of these employment standards is mixed, with many researchers finding widespread noncompliance. This reflects that enforcement is mostly complaint-based and workers are reluctant to complaint.

This is particularly true for vulnerable workers—those with fewer options and less ability to recover from being terminated (however illegally) for complaining. As one person I spoke to last month put it, “employment standards work less well the more reliant you are on it for protection.”

While the conversation we were having identified many ways to improve the operation of Alberta’s employment standards system, it all basically comes back to the ineffectiveness of complaint-based enforcement which renders most employer violations invisible. Under this system, we’re essentially expecting employers to act against their own economic interests and comply with the law.

-- Bob Barnetson