The Building Tradesman Newspaper

Friday, October 04, 2019

New, lesser OT standard set for U.S. workers

By The Building Tradesman

WASHINGTON - The Trump Administration's Labor Department made it official on Sept. 24: a new "final rule" it has published will open the door for 1.3 million additional U.S. workers to earn overtime pay. However, the Labor Department giveth and taketh away: the same rule denies OT protections to 3.2 U.S. million workers who would have been eligible under Obama-era rules, plus denies strengthened overtime protections for an additional five million workers.

"For the first time in over 15 years, America's workers will have an update to overtime regulations that will put overtime pay into the pockets of more than a million working Americans," Acting U.S. Secretary of Labor Patrick Pizzella said. "This rule brings a commonsense approach that offers consistency and certainty for employers as well as clarity and prosperity for American workers."

Countered Heidi Shierholz of the labor-backed Economic Policy Institute: "While the administration may be trumpeting this rule as a good thing for workers, that is a ruse. In reality, the rule leaves behind millions of workers who would have received overtime protections under the much stronger rule, published in 2016, that the Trump administration abandoned."

The final rule will become effective Jan. 1, 2020, after a period this year in which the Labor Department heard some 270,000 public comments on the matter. 

Following are some of the facts of the case:

*Under the current level set in 2004 for a non-supervisory worker who toils more than 40 hours a week, overtime pay is required to be paid if that worker earns less than $23,600 per year. 

*In 2014, President Obama directed the Labor Department to update the overtime regulations in the Fair Labor Standards Act, and broaden OT eligibility to those who earn up to $47,476 per year. Importantly, that rule would have also implemented future increases indexed to the inflation rate.

*A big-business-backed lawsuit protesting the higher eligibility rate was subsequently upheld by a conservative U.S. District Court judge in Texas, so the new rate was never implemented, and the Trump Administration declined to pursue an appeal and had the case dismissed in 2017. The judge ruled that the Labor Department improperly looked at worker pay instead of job descriptions when determining whether a worker should be eligible for overtime pay.

*In March 2019, Trump's Labor Department re-started the rule-making process, and proposed to raise the rate at which overtime is paid to those who earn less than $35,308 per year. That figure is used in the final, published rule - and it does not contain automatic increases tied to inflation.  Then-Labor Secretary Alexander Acosta said in a news release. “....Today’s proposal would bring common sense, consistency, and higher wages to working Americans.” He said the higher threshold proposed by the Obama Administration might “create a stress” for companies with a new mandate. 

*There is likely to be a further business-backed legal challenges, even under these new overtime pay levels. 

"Today's rule is a thoughtful product informed by public comment, listening sessions, and long-standing calculations," Wage and Hour Division Administrator Cheryl Stanton said. "The Wage and Hour Division now turns to help employers comply and ensure that workers will be receiving their overtime pay."

The rule does not affect workers toiling under a collective bargaining agreement if that CBA has its own rules regarding overtime pay, and a higher level of OT pay.

"At its heart, the Trump administration’s rule is based on the notion that someone making $35,568 a year is a well-paid executive who doesn’t need or deserve overtime protections," Shierholz said. "The administration did not need to undertake a new rulemaking—they could have defended the 2016 rule, and supported middle-class workers and their families. Instead, once again, President Trump has sided with the interests of corporate executives over those of working people."

Several states haven’t waited for Trump’s DOL to their overtime pay caps. Washington is the latest to do so. Gov. Jay Inslee (D) announced its hike the same day Trump’s Labor Department did. Its increase in the overtime pay cap would rise yearly, to 2.5 times the state minimum wage by 2026, Inslee said, helping 250,000 workers in that state alone. Washington state already has one of the higher state minimums in the U.S. “Washington is stepping up to protect its workers where the federal government has not. Updating our decades-old overtime rule is one sensible step to ensuring more workers share in our prosperity,” the governor explained. 

Said Washington State Labor Council President Larry Brown: “Because the overtime pay protections have been allowed to erode for decades, millions of Americans have been forced to work longer and longer hours without extra pay," "If everyone who makes just $35,000 per year can be denied extra pay, it’s like their time doesn’t count.”
(Press Associates contributed)