About 4 years ago

10/28/2015 - Commentary: Urban Outfitters Sparks Employment Controversy

The following article appears in the October 28, 2015 edition of Chain Store Age.

By: Joe Kefauver

Chain was not out of line in asking salaried employees to pitch in and help on weekends

There has been a bit of controversy lately regarding Urban Outfitters’ recent request that some of their salaried employees “volunteer” to fill normally hourly roles in fulfillment centers and retail outlets. The labor community and their activist friends have been crying foul over what they perceive is the manipulation of salaried junior managers by forcing them to work “hourly” jobs and getting no additional pay or benefits. They have used this platform as a rationale to validate the Department of Labor’s pending expansion of the federal overtime requirements.

The labor community contends that over the last 30 years, employers have deliberately blurred the lines between what constitutes legitimate managerial responsibility and its corresponding pay structure with what are actual front-line tasks properly performed by hourly employees.

Like anything in politics and policy it’s not a black and white issue. It is true that in some retail industries, some employers have aggressively stretched the definition of what is considered “managerial” in an effort to limit overtime and therefore labor costs. No question about it. Was some level of remedy necessary? Again, yes. But the Labor Department’s proposed remedy goes ridiculously too far and over corrects.

With a threshold of just over $51,000 (among other stipulations) to determine exempt/non-exempt status, the net result will be a mixed bag. Some workers will likely take home a few more dollars than they used to but in the end, employers, especially entry-level employers under very tight margins, will always find a way to control their labor costs as a percentage of sales. Limiting hours and leveraging more part-time workers is an obvious response. At that point, the whole overtime reform effort backfires.

While some may benefit in the short-term, the more significant result will be far fewer management opportunities for countless workers trying to work their way up the ladder. And any approach that results in less upward mobility and fewer pathways to the middle class is just bad policy. So the whole faux uproar in the lefty blogosphere over the actions of Urban Outfitters was a fairly obvious ploy to put more attention on the overtime issue. But it was largely a tree falling in the forest.

Having salaried workers (exempt employees) sometimes perform tasks usually set aside for hourly workers (non-exempt employees) is nothing new. Many retailers, especially in peak shopping periods such as “Black Friday” and the month-long holiday shopping season, ask their managers to pitch in and adopt an “all hands on deck” type of attitude.

During my tenure at Walmart, it was common for home office management throughout the holiday season go out into the stores and just help out anyway possible, from rounding up carts in the parking lot to greeting customers, and also helping them load their cars. Now you would be hard pressed to find someone more cynical than me – in fact, I doubt the sincerity of most cynics. But it never occurred to even me that I was being exploited and soaked for “free hours.” And that’s because I wasn’t. What I was doing was demonstrating leadership, demonstrating my understanding of what is critically important to the business, and demonstrating my willingness to do whatever was possible to help the teams in our stores be successful.

We once had a place here in America where that kind of ridiculous rigidity would not have let me help out my hourly colleagues. Where based on your job classification, you were eliminated from performing certain tasks. Where based on your pay grade, you couldn’t pinch hit for a fellow employee regardless of immediate need. And where the ultimate success of the enterprise played second fiddle to lunch bells and break times. These days, we refer to that place as the “Rust Belt.”

This whole argument plays into the false narrative that the unions perpetuate for their own financial gain – that all workers are miserable, all workers are exploited and that employers keep workers from getting ahead. The trouble for the labor community is that is simply not the case.