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Washington State OKs Some of the Nation’s Toughest OT Rules

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SEATTLE — Washington state is adopting some of the nation’s most aggressive overtime rules, restoring protections for hundreds of thousands of salaried workers and taking what supporters say is a crucial step toward rebuilding the middle class.

The Department of Labor and Industries finalized the rules Wednesday and will phase them in by 2028. By that time, salaried workers making up to about $83,400 a year will be entitled to time-and-a-half pay if they work more than 40 hours per week.

Workers making more than that could also get overtime unless they are certain types of professionals — such as those with higher degrees — or unless they are truly managers or executives, as demonstrated by their ability to  and fire, direct other people’s work or make significant business decisions.

Many job categories will be affected, including shift managers at restaurants and retail establishments, office managers, some medical workers and other white-collar staff, officials said.

“We need to make sure the middle class shares in our state’s prosperity,” Washington Gov. Jay Inslee said in a news release. “Overtime protections ensure workers are fairly compensated when they work more than 40 hours in a given week — time that would otherwise be spent with their families and in their communities.”

Employees who are paid hourly have long been entitled to overtime. But salaried workers have generally been entitled to it only if they make less than a certain amount: about $23,660 under federal law, or more where state laws are more generous.

Those thresholds may have worked decades ago, when they meant that nearly two-thirds of salaried workers nationally were covered by overtime protections. But after a recession in the 1970s, lawmakers largely stopped updating them. Washington’s has been stuck at $13,000 since 1976.

As people’s salaries rose with inflation, they found themselves no longer eligible for overtime. Businesses have also been able to convert hourly workers into salaried ones who make just more than the threshold as a way to avoid  additional staff or paying overtime.

In other cases, workers have been classified as managers when their actual duties more closely resemble those of hourly workers, officials said.

By some estimates, as few as 7% of salaried workers across the country are now entitled to overtime.

The federal government and several states, including California, New York, Pennsylvania, Colorado, Michigan and Massachusetts, have recently updated or started to update their overtime rules, but none have adopted a target threshold as high as Washington’s, said Paul Sonn, state policy program director with the National Employment Law Project.

The rules adopted by the Trump administration will raise the threshold to cover workers making up to $35,308 a year — a significant cut from the $47,000 limit proposed by the Obama administration.

“The overtime threshold is to the middle class as the minimum wage is to low-wage work,” said Nick Hanauer, a Seattle venture capitalist whose think-tank , Civic Ventures, advocates for progressive economic policies. “It is the indispensable labour protection for middle class people.”

Business groups in Washington have agreed that the state’s rules needed to be updated, but they criticized the plans as drastic. The Association of Washington Business, warned when the proposed rules came out in June that they would be a shock to many businesses and that they could particularly hurt nonprofits.

The organization warned that many businesses might convert salaried workers to hourly ones, reducing scheduling flexibility.

After hearing extensive public comment, the department added two years to the phase-in period. The threshold will increase incrementally until it reaches 2.5 times the minimum wage — about $83,400 — by 2028. The rules will phase in more slowly for businesses with fewer than 50 employees.

The department estimates that by the time they are fully implemented, the new rules will give overtime protections to about 260,000 workers who don’t have them and strengthen overtime protections for about 235,000 others. Affected workers will also become eligible for sick leave and retaliation protections.

At a news conference Wednesday, Labor and Industries Director Joel Sacks gave an example of one type of worker who will be protected : a shift manager who makes $40,000 a year but is expected to work 60 hours a week.

Under the new rules, that worker will be paid overtime for the additional hours, or the business will need to  additional staff.

“It’s fair, it’s right and it’s long overdue,” Sacks said.

Among those who might be helped is Victor Duran, a co-manager of a sports apparel store south of Seattle. He said he makes about $52,000 a year and doesn’t get overtime, but is required to work at least 45 hours per week — and up to 60 during the holidays.

“We say bye to the family at the beginning of the season and say we’ll see them after Christmas,” Duran said.

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Ackman’s Hot Streak Continues, Dumps Berkshire, Says ‘We Can Be More Nimble’

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Ackman’s Hot Streak Continues, Dumps Berkshire, Says ‘We Can Be More Nimble’

Bill Ackman’s hot streak continues. This comes after he announced that his Pershing Square hedge fund has returned an average of 25% this year. It also trounces the average hedge fund return of -7%. Additionally, this reveals that it sold its $1 billion stake in Warren Buffett’s Berkshire Hathaway. The fund first invested in Berkshire less than a year ago and only weeks took a larger stake in the conglomerate.

Completely exiting the Berkshire position surprised many on Wall Street, as Ackman has long admired Buffett as a mentor. He recently said that Buffett had built Berkshire “to withstand a global economic shock like this one.”

It appears that Ackman, like many, may have felt frustrated by the lack of activity from Berkshire during the recent market downswing. Berkshire’s cash balance has ballooned to $137 billion. Many, including Ackman, had likely expected a portion of that cash to be used to scoop up bargains during the late-February selloff. The said selloff took markets down nearly 30%.

Instead, Berkshire stood pat, and that appears to have been enough for Ackman to pull the plug on his investment. While discussing the exit, Ackman said that due to Pershing’s smaller size compared to Berkshire, “we can be much more nimble… and so our view was generally we should take advantage of that nimbleness, preserve some extra liquidity in the event that prices get more attractive again.”

Pershing Square’s success over the last two years had thrust Ackman back into the spotlight. This, perhaps, turned the chapter on a period where he became more famous for his misses than his home runs.

He was invested in Valeant Pharmaceuticals as it collapsed. He also famously squabbled on live TV with fellow billionaire Carl Icahn over Herbalife. Then, he gave a nearly 3-hour-long presentation explaining why he thought the company runs as a pyramid scheme. He finally exited his $1 billion short position at a loss.

Ackman’s current hot streak started last year, when Pershing Square returned 58.1%. This is its best annual return since the hedge fund was founded in 2004. After years of letting others make the firm’s investment decisions, Ackman took back the reins in 2018 with a back-to-basics strategy he learned from Buffett.

He returned the fund to a strategy that invests in simple, predictable, cash flow positive companies. He said, “It’s very hard to lose money by buying great businesses if you pay a fair price. For a while there, we forgot that our main job was to make money, so we woke up, and now we’re back in the money making business.”

Making money is exactly what Ackman did earlier this year. He did so with “the single best trade of all-time,” as what many calls it. He correctly predicted that the coronavirus would wreak havoc on our economy. Because of this, Ackman made a $27 million bet that netted his firm a $2.6 billion profit in less than two months as the markets crashed.

Now, his war chest is full again. It appears that Ackman is ready to buy should asset prices come down again.

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4 Ways To Lower Your Mortgage Payments

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4 Ways To Lower Your Mortgage Payments

The number of Americans who have lost their job due to the coronavirus pandemic standing at more than 40 million. With this, many are struggling to pay their mortgage bills each month.

For nearly every one of us, housing is the single largest monthly expense. And unlike kicking a Starbucks habit to save a few dollars every month, your mortgage payment can’t be trimmed out of a budget.

Fortunately, you have some options available to help lower your monthly mortgage payment.

Refinance Your Loan

The Federal Reserve lowered rates back down to zero in late March in response to the coronavirus pandemic. With this, mortgage rates hit new record lows in early May. Bankrate.com is advertising 30-year fixed-rate mortgages as low as 3.5% and 15-year fixed-rate mortgages as low as 2.89%.

The benefit of refinancing at a lower rate is two-fold. The main benefit is with a lower rate on your mortgage, your monthly payment will go down, making it more affordable. The secondary benefit is that with a lower rate, you’ll pay less interest over the life of the loan. This potentially lets you save tens or hundreds of thousands of dollars.

You’ll incur some costs to refinance your loan. So, make sure that your monthly savings are large enough to justify the expense. Additionally, if you’ve had your existing mortgage for a number of years, you’ll be resetting your mortgage amortization back to 15 or 30 years. So if you’ve been paying on your 30-year mortgage for 8 years, instead of having 22 years left, you’ll reset back to 30 years (or down to 15 years if you take a shorter term).

Put Your Stimulus Check or Tax Refund Towards Your Loan

If you still have the $1200 of stimulus funds available, or are collecting a tax refund this year, consider using them towards your monthly mortgage payment. It may only cover a portion of your mortgage or maybe just a month or two. However, using this money instead of dipping into your savings or retirement account is preferable. There are discussions ongoing about a potential second stimulus check, but that may not be until later this summer.

Talk To Your Lender About Mortgage Forbearance

If you don’t have the financial ability to continue paying your mortgage, ask your lender about mortgage forbearance. If granted, this will allow you to skip a few months of payments without becoming delinquent or falling behind on your loan. Before you agree to a forbearance plan, make sure your lender explicitly lays out how you are expected to make up the skipped payments. Some may demand a lump-sum payment for the amount you skipped once your forbearance plan ends. Others may tack the amount onto the end of your loan term. Be sure you know exactly what the lender will do once you enter the forbearance agreement.

Find Out If A Mortgage Modification Is Available

If you find yourself falling behind on your mortgage payments and are facing default, your lender may be able to offer you a mortgage modification. A modification changes the terms of the original loan, such as lowering the interest rate, extending the term, or even reducing the principal balance. Typically, a modification is only allowed when the loan is in default. Therefore, if you are making timely payments and are current on your loan, this likely won’t be an option for you. But if you are having financial difficulties, your lender may be able to modify the loan and prevent you from going into foreclosure.

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USDA to Provide $1B in Loan Guarantees for Rural Businesses and AG Producers

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USDA to provide $1B in loan guarantees for rural businesses and ag producers

U.S. Secretary of Agriculture Sonny Perdue recently announced that the department is making available up to $1 billion in loan guarantees to help rural businesses meet their working capital needs during the coronavirus pandemic. Additionally, agricultural producers that are not eligible for USDA Farm Service Agency loans may receive funding under USDA Business & Industry (B&I) CARES Act Program provisions included in the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

“Under the leadership of President Trump, USDA is committed to being a strong partner to rural businesses and agricultural producers and being a strong supporter of all aspects of the rural economy,” Perdue said. “Ensuring more rural agricultural producers are able to gain access to much-needed capital in these unprecedented times is a cornerstone of that commitment.”

In addition to expanding eligibility to certain agricultural producers, the changes Perdue announced allows the USDA to:

— Provide 90 percent guarantees on B&I CARES Act Program loans;

— Set the application and guarantee fee at 2 percent of the loan;

— Accept appraisals completed within two years of the loan application date;

— Not require discounting of collateral for working capital loans, and

— Extend the maximum term for working capital loans to 10 years.

B&I CARES Act Program loans must be used as working capital to prevent, prepare for or respond to the effects of the coronavirus pandemic. The loans may be used only to support rural businesses, including agricultural producers, that were in operation on Feb. 15, 2020.

USDA intends to consider applications in the order they are received. However, the department may assign priority points to projects if the demand for funds exceeds availability.

USDA announced the expanded B&I CARES Act Program authorities in a notice published in the May 21 Federal Register (PDF, 217 KB). Program funding expires Sept. 30, 2021.

Eligible applicants may contact their local USDA Rural Development State Office in the state where the project is located.

USDA is developing application guides for lenders and borrowers on the B&I CARES Act Program. The agency also will host a webinar to provide an overview of program requirements.

To register for the webinar to be held at 2 p.m. Wednesday, June 3, visit: globalmeetwebinar.webcasts.com/starthere.jsp?ei=1324161&tp_key=6067315417.

USDA Rural Development provides loans and grants to help expand economic opportunities and create jobs in rural areas. This assistance supports infrastructure improvements; business development; housing; community facilities such as schools, public safety and health care; and high-speed internet access in rural areas. For more information, visit: www.rd.usda.gov.

© © Copyright 2020, The Shippensburg News-Chronicle

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