Sanders proposes 32-hour workweek with overtime mandate

Higher labor costs would push employers to adopt AI, columnist calculates

Federal legislation proposed by Sen. Bernie Sanders would lower the standard threshold for time-and-a-half overtime pay from 40 hours to 32 hours per week, phasing in over a few years, according to a column published Sunday in The Guardian’s US small business section.

Writing in the column, small-business writer Gene Marks identified the cost to employers as the proposal’s central problem and warned that the resulting higher labor costs would give small businesses a new financial incentive to automate with artificial intelligence. “There’s just one problem: somebody has to pay for it,” Marks wrote. “For business owners, this isn’t an ideological argument. It’s math.”

Marks worked through the math with a hypothetical example: an employee earning $50,000 a year for a 40-hour workweek across 50 weeks would generate about $25 an hour in wages. Under Sanders’ proposed threshold, the first 32 hours would carry that same hourly rate, but the final eight hours of the standard workweek would be paid at the overtime rate of $37.50 an hour, raising per-employee annual wages from $50,000 to about $55,000.

The column’s per-employee wage increase of $5,000, Marks wrote, does not include other costs typically calculated as a percentage of pay — retirement contributions, workers’ compensation and similar benefits — all of which would also rise.

Adding federal and state employer payroll taxes, which Marks estimated at about 7% of wages, would add roughly $350 more per employee each year. For a small business with 25 employees, Marks calculated the new overtime mandate would add about $133,750 in annual payroll costs; for a 50-person firm, about $267,500 a year.

Marks acknowledged that employers could respond by capping the workweek at 32 hours rather than paying overtime. He argued, however, that tight labor markets make that option impractical for most businesses, writing that with unemployment and open jobs at historically low levels, employers “can’t find enough employees to do the work they have.”

The higher labor costs would, in Marks’ view, give small businesses a new financial reason to invest in AI. “The owner of a 50-person company would gladly spend $100,000 on an AI project to save $267,500 per year,” he wrote, adding that “the CEOs of Microsoft, Google, Anthropic and OpenAI must love this.” Marks also pointed to Sanders’ separate public call for an AI development moratorium, writing that “Sanders wants a moratorium on AI development. But now he’s proposing a law which would give employers another financial incentive to automate.”

In place of a federal mandate, Marks argued that tax incentives could more effectively encourage employers to reshape the workweek. He pointed to existing employer tax credits for family leave and dependent-care expenses as a model already in place, and noted that those forms of compensation more directly address what he characterized as the priorities of younger generations, which he said make up more than half of today’s workforce.

Marks also cited a study published in the Journal of Managerial Psychology, which he said found that “a vacation time benefit gave surveyed employees an internalized sense of being treated and valued as a complete human being” and that a majority of surveyed employees favored additional time off over an equivalent cash bonus.

He acknowledged that four 10-hour days are not workable for every job. “I know nurses, veterinarians, and healthcare and construction workers who are employed by firms that offer their employees to work four 10-hour days and take three days off,” Marks wrote. “They love it.” For roles that cannot accommodate that schedule, he wrote, other paid-time-off plans should be considered.