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Category: overtime pay

New Trump Overtime Rules Will Cost Workers $1.4 Billion in First Year Alone

Posted on by Kelly Ross
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The Trump administration’s Labor Department issued new overtime rules this week that take away $1.4 billion of workers’ pay every year compared to the Obama administration rules they replace. The amount of this pay cut for working people will increase enormously over time.

Although the economic recovery that started in 2009 under then-President Obama is now officially more than 10 years old, workers’ wages are still barely budging. Something is clearly wrong with the economy. Workers are not getting our fair share of the profits we help produce.

The Obama administration tried to do something about this problem by making millions more workers eligible for overtime pay, restoring protections that have eroded in recent decades.

Instead of defending the Obama administration’s overtime rules against a poorly reasoned and seriously flawed district court decision, the Trump administration decided to replace them with a new set of rules that protect millions fewer workers.

The Obama rules would extend overtime eligibility to 3.2 million more workers than the Trump rules that replace them. In addition, the Obama rules would make it harder for businesses to misclassify millions of overtime-eligible workers?—5 million more than the Trump rules.

The Obama rules would extend overtime eligibility to millions more workers by raising the salary threshold, which is used to determine which workers are eligible for overtime. Workers who earn less than the salary threshold are automatically eligible; so the higher the threshold, the more workers covered. Under the Obama rules, the threshold would be $51,000 in 2020. This would actually be a lower threshold than if you simply adjusted the 1975 level for inflation?—which comes out to $56,500. By contrast, the Trump rules now set the threshold at only $35,568.

The Trump overtime rules also protect fewer and fewer workers every year as inflation eats away at the value of the salary threshold. The Obama overtime rules would put a stop to this constant erosion of overtime coverage by providing for regular automatic updates of the salary threshold. The Trump rules leave out this essential safeguard for working people. This is why the annual pay loss to workers of $1.4 billion in the first year alone will keep getting bigger every year.

This blog was originally published at AFL-CIO on September 26, 2019. Reprinted with permission. 

About the Author: Kelly Ross is the deputy policy director at the AFL–CIO.


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News from the Courts: Executive Orders Partially Struck Down

Posted on by The Attorneys of Passman and Kaplan
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News from the Courts: On August 25, 2018, Judge Ketanji Brown Jackson of the U.S. District Court for the District of Columbia issued a 122-page memorandum opinion in American Federation of Government Employees et al. v. Trump, No. 1:18-cv-1261. The Court struck down significant portions of the three May 25, 2018 executive orders concerning federal employees.

As previously analyzed in this blog, Executive Orders 13,837-13,839 announced a number of new policies relating to federal employees, both as to the rights of individual employees and the rights of federal sector unions who represent federal employees. After the executive orders were issued, a number of federal sector unions all sued to block implementation; their various lawsuits were then consolidated into the single lawsuit in front of Judge Jackson, which then proceeded to expedited cross-motions for summary judgment. The unions focused their attack on provisions chiefly dealing with the union issues; certain other provisions whose effect was not limited to unions were not included in the lawsuit.

Judge Jackson ultimately found that a number of provisions in the three executive orders violated federal statutes governing collective bargaining, chiefly by pre-deciding major issues which Congress had intended to be decided between unions and agencies through bargaining. Included in the list of provisions which the court struck down were restrictions on the amount of official time and the availability of below-market office space to unions. Concerning individual employees, the court also struck down Section 4c of Executive Order 13,839, which limited Performance Improvement Plan (PIP) periods to 30 days unless the agency in its sole discretion opted for a longer period.

However, several other provisions which impact federal employees remain in effect. Section 5 of Executive Order 13,839, which limits the ability to modify disciplinary or performance records in settlement, was not challenged in the lawsuit and fell outside the scope of Judge Jackson’s Memorandum Order. Sections 2f-2g of Executive Order 13,839, which set time limits for processing of disciplinary actions, also fell outside the scope of the lawsuit. These provisions potentially remain on the books, although outstanding issues remain open (for example, the Office of Personnel Management (OPM) has not yet completed its review of the need for possible implementing regulations).

This blog was originally published by Passman & Kaplan, P.C., Attorneys at Law on September 4, 2018. Reprinted with permission.

About the Author: Founded in 1990 by Edward H. Passman and Joseph V. Kaplan, Passman & Kaplan, P.C., Attorneys at Law, is focused on protecting the rights of federal employees and promoting workplace fairness. The attorneys of Passman & Kaplan (Edward H. Passman, Joseph V. Kaplan, Adria S. Zeldin, Andrew J. Perlmutter, Johnathan P. Lloyd and Erik D. Snyder) represent federal employees before the Equal Employment Opportunity Commission (EEOC), the Merit Systems Protection Board (MSPB), the Office of Special Counsel (OSC), the Office of Personnel Management (OPM) and other federal administrative agencies, and also represent employees in U.S. District and Appeals Courts.


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460,000 more workers could get overtime in Pennsylvania

Posted on by Laura Clawson
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The Obama administration’s effort to extend overtime eligibility to millions of workers may have stalled first in the courts and then because, well, Donald Trump. But for workers in at least one state, there’s hope of progress. Pennsylvania Gov. Tom Wolf has proposed phasing in a higher overtime eligibility threshold in his state:

The first step will raise the salary level to determine overtime eligibility for most workers from the federal minimum of $455 per week, $23,660 annually, to $610 per week, $31,720 annually, on Jan. 1, 2020. The threshold will increase to $39,832 on Jan. 1, 2021, followed by $47,892 in 2022, extending overtime eligibility to 370,000 workers and up to 460,000 in four years.

Starting in 2022, the salary threshold will update automatically every three years so workers are not left behind.  Additionally, the duties for executive, administration and professional workers will be clarified to make it easier for employers to know if a worker qualifies for overtime.

The Economic Policy Institute notes that:

On overtime pay, the governor has authority to act without the state legislature. On another vital measure to improve the lives of working families, raising the minimum wage, legislative action is required—and Pennsylvania still lags its neighboring states. Unlike these six contiguous states, the Pennsylvania legislature has failed to increase the minimum wage above the federal level of $7.25.

Which is one more reason Pennsylvania’s 2018 elections will matter. A lot.

 This blog was originally published at DailyKos on January 20, 2018. Reprinted with permission. 
About the Author: Laura Clawson is labor editor at Daily Kos.

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With All Eyes on DACA, the Trump Administration Is Quietly Killing Overtime Protections

Posted on by Michael Arria
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On September 5, the administration of Donald Trump formally announced that they won’t try to save Obama’s overtime rule, effectively killing a potential raise for millions of Americans. This disturbing development has largely slipped under the radar during a busy news week, marked by Trump’s scrapping of the Deferred Action for Childhood Arrivals (DACA) program.

Twenty-one states and a number of business groups sued the Obama administration last September, after the Department of Labor (DOL) announced the new rule, accusing the former president of overreach.

That lawsuit led to Amos Mazzant, a federal Obama-appointed judge in Texas, putting the rule on hold last November, shortly before it was set to become law. On August 31, Mazzant struck the rule down, and—less than a week later—Trump’s Department of Justice (DOJ) declined to challenge the District Court’s decision. In a court filing, a DOJ lawyer said that the administration would not appeal.

The Obama administration’s rule would have raised the overtime salary threshold considerably. The threshold hadn’t been increased by any administration to adequately reflect wage growth or inflation, which means that many workers only see overtime pay if they make less than about $23,660 a year. Obama had scheduled that number to be bumped up to about $47,476 after reviewing 300,000 comments on the subject.

“The overtime rule is about making sure middle-class jobs pay middle-class wages,” former Labor Secretary Tom Perez told reporters on a call after the rule was announced in May 2016. “Some will see more money in their pockets … Some will get more time with their family … and everybody will receive clarity on where they stand, so that they can stand up for their rights.”

While the overtime rule faced predictable opposition from Republicans and business groups, it also received backlash from some liberal advocacy organizations. In May 2016, U.S. PIRG, the popular federation of non-profit organizations, released a statement criticizing Obama’s decision. “Organizations like ours rely on small donations from individuals to pay the bills. We can’t expect those individuals to double the amount they donate,” said the group.

Critics of the statement pointed out that U.S. PIRG’s opposition suggests they have employees not being paid for overtime despite their low wages. The group was slammed by progressives for supporting a regressive policy when it benefited their economic interests.

The DOL claimed that the rule would mean a pay increase for about 4.2 million Americans, but the Economic Policy Institute (EPI) contends that the DOL’s figure is far too low. According to EPI, the DOL’s analysis fails to take the impact of George W. Bush’s overtime policies into account and relies heavily on statistics that were generated before he took power. EPI estimates that, because of changes to employee classifications in 2004, roughly 6 million workers had their right to overtime destroyed.

The EPI’s study of the overtime rule determined that about 12.5 million workers would have been impacted if it had been implemented. A wide range of workers would have potentially seen a pay increase, including 6.4 million women, 1.5 million African Americans and 2.0 million Latinos, the EPI concludes.

“Once again, the Trump administration has sided with corporate interests over workers, in this case, siding with business groups who care more about corporate profits than about allowing working people earn overtime pay,” Heidi Shierholz, who leads the EPI’s Perkins Project on Worker Rights and Wages, told In These Times.

The Trump administration’s move might be disappointing for workers’ rights advocates, but it’s hardly surprising. As a presidential candidate in 2016, Trump vowed to kill the overtime rule if elected. “We have to address the issues of over-taxation and overregulation and the lack of access to credit markets to get our small business owners thriving again,” he said in an interview. “Rolling back the overtime regulation is just one example of the many regulations that need to be addressed to do that.”

While many pundits have focused on Trump’s unrelenting series of failures and scandals, his administration has quietly waged a fairly successful war on labor. In addition to nixing one of Obama’s most notable policy achievements, the Trump administration is also poised to stack the National Labor Relations Board with a pro-business majority, has proposed major cuts to the Labor Department and has rolled back safety protections for workers.

Last month, Bloomberg reported that Trump’s Labor Department had created an office specifically designed to reconsider government regulations. The office will be run by Nathan Mehrens, the anti-union lawyer who is also in charge of the department’s policy shop.

Trump geared much of his campaign rhetoric toward the U.S. worker, vowing to dismantle exploitative trade agreements and bring back jobs. However, his administration has simply emboldened the anti-labor forces that have dictated economic policy for decades.

This blog was originally published at In These Times on September 7, 2017. Reprinted with permission. 

About the Author: Michael Arria covers labor and social movements. Follow him on Twitter: @michaelarria


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Trump has bad news for millions of workers in line for overtime pay under Obama

Posted on by Laura Clawson
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Donald Trump’s major life goal at this point seems to be rolling back everything good President Barack Obama did for the country and its people—and now he’s coming for your overtime pay. Obama had sought to raise the overtime eligibility threshold to include millions more workers, a change that was supposed to go into effect in December but was blocked at the last minute by a judge. Now, of course—of course—Mr. Populist is rolling back Obama’s expansion. Trump’s Labor Department announced Tuesday that it would be doing something to the overtime eligibility threshold, but it’s not clear what, and they’re definitely not going to be raising the threshold to $47,000 like Obama proposed.

In the final days of the Obama administration, the Labor Department had appealed the judge’s decision blocking implementation of the raise, and Trump’s Labor Department agreed in court that it has the power to set the eligibility threshold. But Labor Secretary Alexander Acosta plans to use that power in a very different way than Tom Perez did under Obama:

On Tuesday, the department said in light of the pending appeal, it decided to issue a request for comments rather than skip immediately to rescinding or revising the rule.

The agency asked for input on whether the current threshold of $23,660 set in 2004 should be updated for inflation, and whether there should be multiple levels based on region, employer size, industry or other factors. […]

The department also asked employers to explain how they prepared for the rule to take effect and whether it has had an outsize impact on small businesses and particular industries.

The department said it was considering eliminating the salary threshold, leaving overtime eligibility to be based on workers’ job duties.

Mind you, the Obama administration already had a lengthy comment period and took 300,000 comments. But we know the Trump regime will be listening to comments from one set of people in particular: bosses who want to exploit their workers.

This blog was originally published at DailyKos by Laura Clawson on July 26, 2017. Reprinted with permission.

About the Author: Laura Clawson is labor editor at DailyKos.


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The GOP Just Got One Step Closer to Taking Away Your Overtime Pay

Posted on by Elizabeth Grossman
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Republicans have passed yet another bill that erodes protections for working families.

A bill Republicans have been pushing for years that undermines overtime pay just cleared the House. Called the “Working Families Flexibility Act” (H.R. 1180), it would amend the Fair Labor Standards Act to allow private companies to offer employees “comp” time instead of overtime pay for hours worked beyond a 40-hour work week.

The bill is being sold by Republicans as family friendly and “pro-worker,” allowing workers to take time off to attend to family needs. But Democrats and scores of labor and worker advocacy groups oppose the bill, saying it offers employees a false choice between pay and time off, effectively depriving workers of earned overtime without providing guarantees of family leave or stable work schedules.

The bill passed Tuesday, by a vote of 229-197, with six Republicans joining the 191 Democrats voting “no.” Sen. Mike Lee, a Republican from Utah, has introduced a companion Senate bill (S. 801) but no further action is scheduled. The Senate bill, like the House bill, has no Democratic sponsors. A spokesman for Senate Committee on Health, Education, Labor and Pensions chair Lamar Alexander, who supports the bill, said the senator “hopes to see the bill taken up by the Senate when time allows.”

“With working families across the country scraping to make ends meet, Congress should strengthen protections for workers—not gut protections already on the books,” Sen. Elizabeth Warren, a Democrat from Massachusetts, said in statement. With their vote, she said, “House Republicans are actually voting to make it legal for employers to cheat their workers out of overtime pay. This is a disgrace.”

“This is no substitute for paid sick leave, paid family leave and the genuine protections families need. This is a way for employers to avoid paying overtime,” said National Employment Law Project federal advocacy coordinator Judy Conti.

Other critics, including the American Sustainable Business Council, call the bill “badly designed, with too much potential for abuse by employers.” Concerns include potential wage theft, favoring workers who choose comp time over paid overtime and employees’ inability to use the comp time when they actually need it. A letter from nearly 90 groups opposing the bill notes that the bill provides no guarantee that workers would get their earned overtime if a company goes bankrupt or closes up shop.

The bill would allow employers to hold the cash equivalent of overtime their workers earn. Employees could then take those hours off at a later date or cash out at the end of a calendar year. Employers would also be required to pay workers overtime owed within 30 days of receiving a written request from an employee who changes her mind and wants cash rather than time off.

Analysis by the Economic Policy Institute shows how the bill doesn’t offer workers anything new and could leave them worse off financially. Or, as House Committee on Education and the Workforce Ranking Member, Rep. Bobby Scott, a Democrat from Virginia, said during the bill’s markup, “H.R. 1180 doesn’t give employees any rights they don’t already have … The bill does, however, create a new right for employers to withhold employees’ overtime pay.”

Committee Republicans say workers are being held back now by current rules and that the bill includes “numerous protections” to ensure employee choice. Democrats, however, say it does nothing to strengthen “existing workplace protections” or “flexibility.” Labor groups on record opposing the bill include the Service Employees International Union (SEIU), Restaurant Opportunities Center United, International Brotherhood of Teamsters, National Partnership for Women and Families and the Leadership Conference on Civil and Human Rights.

The legislation comes as the Obama administration’s rule to extend overtime pay to workers making up to $47,476 (double the current limit of $23,660) remains in legal limbo. That rule was expected to benefit more than 4 million workers. The bill also comes while most U.S. workers remain without access to paid family leave.

A recent Pew survey found that in 2016, only 14 percent of U.S. civilian workers had paid family leave, while 88 percent relied on unpaid family leave guar
anteed to those eligible by the Family and Medical Leave Act.

“The so-called Working Families Flexibility Act is not a solution,” committee member Rep. Suzanne Bonamici, a Democrat from Oregon, said in a statement. It’s “long past time,” she said, “that Congress enacted meaningful solutions to raise workers’ wages, increase access to paid sick days and family leave, provide flexible and predictable scheduling.”

This article originally appeared at Inthesetimes.com on May 3, 2017. Reprinted with permission.

About the Author: Elizabeth Grossman is the author of Chasing Molecules: Poisonous Products, Human Health, and the Promise of Green Chemistry, High Tech Trash: Digital Devices, Hidden Toxics, and Human Health, and other books. Her work has appeared in a variety of publications including Scientific American,Yale e360, Environmental Health Perspectives, Mother Jones, Ensia, Time, Civil Eats, The Guardian, The Washington Post, Salon and The Nation.


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Thanks, Obama. Millions More Workers To Get Overtime Pay.

Posted on by Laura Clawson
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LauraClawsonIt’s been in the works for months, but on Wednesday it becomes official: The Obama administration is making millions of workers eligible for overtime pay if they work more than 40 hours a week. Currently, only workers making salaries of less than $23,660 a year—$455 a week—automatically get overtime pay when they work extra hours. Effective December 1, that number will double to $47,476, which is less than the “about $50,400” the president announced last summer, but still enough to directly cover an additional 4.2 million workers.

On a call with reporters Tuesday, Labor Secretary Tom Perez said the reform was meant to address “both underpay and overwork.”

“The overtime rule is about making sure middle-class jobs pay middle-class wages,” Perez said. “Some will see more money in their pockets … Some will get more time with their family … and everybody will receive clarity on where they stand, so that they can stand up for their rights.”

In addition to the 4.2 million workers who will automatically become eligible for overtime pay, more than eight million more are expected to get overtime because their employers will no longer be able to dodge the rules by calling them managers even though little of their work is managerial.

That includes workers like one cited in Obama’s email announcing the change:

As an assistant manager at a sandwich shop, Elizabeth sometimes worked as many as 70 hours a week, without a dime of overtime pay. So Elizabeth wrote to me to say how hard it is to build a bright future for her son.

It’s a shame the Obama administration didn’t stick with a new threshold of more than $50,000, but doubling the existing, pitifully low threshold and updating it every three years, as is included in the new rule, is a major advance for millions of workers. And as always, it’s a reminder that a Democratic president who’s prepared to use every aspect of government can do a lot, even with a Republican Congress blocking so much.

This blog originally appeared at DailyKOS.com on May 18, 2016. Reprinted with permission. 

Laura Clawson has been a Daily Kos contributing editor since December 2006. Labor editor since 2011.


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This week in the war on workers: More whining about Obama’s plan to expand overtime

Posted on by Laura Clawson
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A bunch of congressional Republicans (and two Democrats who should be ashamed of themselves) are very upset that the Obama administration plans to expand overtime pay eligibility. The lawmakers have written a letter to Labor Secretary Tom Perez expressing concern about changes that aren’t even being made, but mostly about the fact that they don’t want people to get overtime pay:

What is in the rule, which the members of Congress who signed the letter don’t like, is a long overdue increase in the salary an employee must be paid if an employer wants to avoid paying overtime. The current rule sets that exemption threshold at $23,660 a year—below the poverty line for a family of four. The proposed rule, as the representatives note, “would raise the salary threshold and require employers to pay overtime for all employees who make $50,440 or less per year.” The signers don’t like that, but the reasons they give don’t hold water.

The letter says the increase in the threshold would suddenly make 5 million employees eligible for overtime pay. That’s true, and it’s a good thing. Making employers pay their employees extra when they work more than 40 hours in a week is the purpose of the Fair Labor Standards Act. It’s good for those employees and their families, whether they get paid more or are simply allowed to spend more time with their families. And because it applies to all employers equally, it will not create competitive burdens.

The representatives claim the proposed salary threshold somehow fails to take into account the fact that “the purchasing power of a dollar is drastically different in various parts of our country.” But the claim is ridiculous. The point of the salary threshold is that workers paid less than this amount—even if they are classified by their employers as managers or executives—are automatically entitled to overtime protections. Essentially, this threshold separates workers with genuine managerial and professional responsibility, who have substantial autonomy over their work schedule and have real bargaining clout with their employers, from those workers who are simply labeled “managers” (often by employers precisely looking to avoid the obligation to pay overtime) but who nevertheless can be compelled to work long hours.

A fair day’s wage

? Workers in Las Vegas’s Culinary Union were denied a permit to protest outside the Palace Station Hotel & Casino, so they were like “fine, we’ll commit nonviolent civil disobedience … “

? A Kentucky judge ruled against a county-level anti-union law.

? Wage theft, sexual assault, and no sick leave: The horrible conditions facing poultry workers.

Education

? This is vile behavior to see from a teacher, let alone a teacher whose school has elevated her as a model for others. And before dismissing it as a one-time occurrence, consider that the video was recorded by an assistant teacher who was sick of watching that sort of thing. And that at Success Academy charter schools:

Jessica Reid Sliwerski, 34, worked at Success Academy Harlem 1 and Success Academy Harlem 2 from 2008 to 2011, first as a teacher and then as an assistant principal. She said that, starting in third grade, when children begin taking the state exams, embarrassing or belittling children for work seen as slipshod was a regular occurrence, and in some cases encouraged by network leaders.

? A war on teachers in Virginia.

? John Kasich is riding high in the Republican presidential primary, at least temporarily, so let’s take a look at Kasich’s education record.

This blog originally appeared in dailykos.com on February 13, 2016. Reprinted with permission.

Laura Clawson has been a Daily Kos contributing editor since December 2006 and Labor editor since 2011.


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NPR Does Mind-Reading on Overtime Rule

Posted on by Dean Baker
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Image: Dean BakerNPR had a bizarre piece on the Labor Department’s new overtime rules which seemed intended to undermine support for them. These rules would increase from $23,660 to $50,440, the floor under which salaried workers would automatically qualify for overtime regardless of their work responsibilities.

While the piece does present the views on the new rules of Vicki Shabo, the vice-president of the National Partnership for Women and Families, the bulk of the piece is devoted to presenting the views of employers. No workers who will be affected by this rule were interviewed.

The discussion of the employers’ perspective begins with this little exercise in mind reading:

“But employers do not believe it would be a windfall for workers. They say they will be forced to cut costs in other ways if the proposed rules take effect as written — and that workers may not like those changes.”

Of course NPR reporters don’t know what employers “believe,” they know what they say. And it is understandable that they would tell a reporter that they don’t like the rules because they hurt workers, as opposed to the possibility that the new rules may hurt profits or force a cut in their own pay. Remarkably, two of the three employers whose views are presented in this piece work at non-profits, even though the vast majority of the workers affected are employed by for profit businesses.

The first employer is at the Michigan Health and Hospital Association which reportedly employs 107 workers.

“â€It only takes one bus accident, or one fire or something like the Ebola crisis,’ says Nancy McKeague, chief of human resources.

“She says her nonprofit can’t afford overtime, but it also can’t forgo having people work as needed.”

In effect, Ms. McKeague is saying that she is not paying workers for the time they work in an emergency, forcing them to work for free under such circumstances. This would be like having a lease with a landlord where the rent would be cut in half in the event of one bus accident or one fire or something like the Ebola crisis. No one would expect a landlord to agree to such a lease, but apparently Ms. McKeague believes that her workers should accept this sort of labor contract.

The piece also wrongly asserts:

“The rules will also require her to review tasks associated with every job to see whether the position qualifies for overtime.”

In fact, the opposite is true. She should have already been reviewing the tasks associated with every job to see whether the position qualifies for overtime. She apparently assumed that the positions in question did not qualify for overtime, but this actually requires an assessment of job duties to determine whether workers have enough supervisory responsibilities to be exempt from overtime requirements. Under the new rules no such review is necessary, if they earn less than the pay cutoff, workers qualify for overtime regardless of what tasks they perform.

Next we get Cecilia Boudreaux, the human resources director for the Regina Coeli Child Development Center, a Head Start program in Robert, La.The piece tells us:

“Under the new rules, Boudreaux says, 26 of her 35 salaried employees would qualify for overtime pay, in the event of a building emergency or if a parent is late for pickup. But increasing salaries would cost at least $74,000 extra a year — meaning she’d have to cut costs elsewhere.”

Actually, nothing about the new rules requires Ms. Boudreaux to increase salaries by a dime. She can simply rewrite contracts so that workers have a lower normal pay rate. Then if they work a normal amount of overtime they would end up with the same pay as they get now. If they work less than normal, they would get paid less and if they work more than normal they would get paid more. There is no reason that the change in rules would necessarily add to the center’s cost, it just removes the risk for workers that they would be forced to work unpaid overtime or risk losing their job.

Then we hear from Tony Murray, HR director for Diamond B Construction. According to the piece, Murray says many workers would consider going from salaried to hourly a demotion.

“â€â€ťWhen I was younger, all I [wanted] to do was get to a salaried position just simply because you knew what was going to be coming in each week and you did have the flexibility,” he says, including the ability to go to soccer tournaments or work late to make up for doctor’s appointments. Murray says under the new rules, those converted back to hourly status wouldn’t be able to do that.

“â€Millennials take into account more than anything workplace flexibility,’ he says. â€And of course who do you think is in that entry-level management … millennials more than anything.’”

It might have been helpful to talk to some of Mr. Murray’s workers to see if his assessment of their view of the new overtime rules is correct.

This blog originally appeared on CEPRE.net on September 15, 2014. Reprinted with permission. 

About the Author: Dean Baker is an American economist whose books have been published by the University of Chicago Press, MIT Press, and Cambridge University Press. 


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Changes to Overtime Rules Getting Closer: Act Now!

Posted on by Erik Idoni
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erik idoniRecently, the Department of Labor proposed a rule to bring overtime up-to-date. If the proposal goes into effect, an additional 5 million white-collar workers are expected to benefit from overtime. The Department of Labor wants to hear your voice on this proposal and until this Friday, September 4, 2015, they are taking comments on the proposed rule.

Whether a worker receives overtime or not is determined by a three-part test. Under this test, the employee does not receive overtime when:

  1. they are paid a fixed salary;
  2. their salary is at least $455 a week (which equates to $23,660 a year); and
  3. their job primarily involves executive, administrative, or professional duties.

Furthermore, there are exemptions for highly compensated employees who regularly perform executive, administrative, or professional duties and make at least $100,000 a year, including at least $455 a week via salary or fees.

The Department of Labor’s proposal would focus on the salary aspect of the three-part test. Instead of a stagnant number, the salary standard would be set at the 40th percentile of weekly earnings for full-time salaried workers, which is expected to be about $970 a week, $50,440 a year, in 2016. For highly compensated employees, the standard would be set at the 90th percentile, expected to be $122,148 annually.

This proposal would be a drastic change, but a necessary one. The salary threshold has only been updated twice in the last 40 years. As a result, only 8% of full-time salaried workers fall under the threshold. This is a stark contrast from 1975 when 62% of full-time salaried workers fell below the threshold. Under the Department of Labor’s proposal, of the five million new workers expected to qualify for overtime, 53% of them would have college degrees and 56% would be women.

These days, the few that do fall under the salary threshold for overtime likely fall under another threshold, the poverty line. The poverty line for a family of four is $24,008 a year, or $348 more than the overtime threshold. This means that, a worker making $460 a week could work 50 hours every week, receive no overtime pay, and be below the poverty line.

The Department of Labor’s proposal can still change and they want to hear from you on a wide variety of issues. The agency wants your opinion on the proposal to use the 40th and 90th percentiles, or switch to using changes in inflation to determine the salary threshold. They want to know whether the three-part test is working. First and foremost, they want to know what overtime pay would mean to you and your family.

Make your voice heard and make it clear that this is an important issue that has been ignored for far too long. Share your ideas on the proposal here and your story here. You only have until Friday, but please, don’t make the comments too long they would have to work overtime to read them all, and chances are they don’t get paid for that.

 

About the Author: The author’s name is Erik Idoni. Erik Idoni is a student at the George Mason University School of Law and an intern at Workplace Fairness.


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