The Trump administration on Thursday proposed new rules mandating when certain workers must be given overtime pay, pushing a plan that would raise pay for more than a million people but scales back the previous administration’s plans to expand overtime pay to even more workers.
Under the administration’s proposal, employees who earn under $35,308 a year must be paid overtime if they work more than 40 hours per week, according to a news release from the Department of Labor. Under current law, that number is set at $23,660 -- approximately 30 percent lower than the administration’s proposal.
The Obama administration had proposed a more aggressive threshold, mandating overtime pay to those earning less than about $47,000 annually, but that plan was thwarted by a court challenge brought by more than a dozen Republican states and has never taken effect. The Obama administration plan would have made overtime pay available to more than four million additional workers, while the Trump administration estimates its plan would affect 1.1 million workers. The rule proposed by the Obama administration was invalidated by a Texas judge weeks before it was scheduled to go into effect.
“Our economy has more job openings than job seekers and more Americans are joining the labor force,” Labor Secretary Alexander Acosta said in a news release. “....Today’s proposal would bring common sense, consistency, and higher wages to working Americans.”
The current overtime rules have not been updated since 2004, during the Bush administration. The Trump administration announced in 2017 that it was reviewing Obama’s proposed rule, with Acosta acknowledging workers’ costs had risen but telling lawmakers doubling the threshold might “create a stress” for companies with a new mandate.
The proposal will now head to the Federal Register for a 60 day public comment proposal, but will face further review from and likely legal challenge. Congressional Democrats are expected to soon propose legislation that would more significantly expand overtime protections for workers, Bloomberg Law reported, but the bill is unlikely to pass the Republican-controlled Senate.
Workers who are paid on an hourly basis are entitled to overtime regardless of their income. But a number of workers in retail, fast food, and other industries have been categorized as having supervisory responsibilities, thus depriving them of overtime pay even if they make as little as $23,000.
In the 1970′s, over 65 percent of America’s salaried workforce was covered by the nation’s overtime rules. Because of the 2004 overtime regulations, which dramatically weakened coverage, that number has now shrunk to 7 percent, said Judy Conti, government affairs director for the National Employment Law Project. The Trump administration’s rule would likely raise it to at most 25 percent, while Obama’s would have raised it do about 33 percent.
“The Trump Department of Labor is pretending to be a champion of workers but all they are doing is perpetuating a system that allows people to get phony titles and marginal extra responsibilities so they can be made to work as many hours as an employer wants without any extra pay at all," Conti said. “No one should mistake this as a pro-worker policy.”