The Building Tradesman Newspaper

Friday, May 31, 2019

Whitmer urges DOL to widen eligibility for worker overtime wages

By Marty Mulcahy, Editor

LANSING - President Trump almost certainly didn't ask for her opinion on upholding wage standards for Michigan workers, but Gov. Gretchen Whitmer gave it, anyway.

In a letter dated May 17, Whitmer wrote a letter to the U.S. Department of Labor's Melissa Smith, offering her opposition to a Trump Administration proposal that would limit overtime income eligibility for millions of Americans compared to an Obama-era standard.

“These changes to the overtime rule are far too weak to provide Michigan’s workers with the overtime pay protections that they need and deserve,” Whitmer wrote to Smith, the DOL's director of the Wage and Hour Division's Regulations, Legislation, and Interpretation section. “This hurts Michigan’s working families and fails to ensure that working people who work long hours away from their families for their jobs are paid fairly for their time.”  

Organized labor has been extremely vocal protesting the Trump Administration's new OT rules, which cut off access to higher overtime pay for about 22 million U.S. workers. 

Under the current standard 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.

In May 2016, after receiving more than 270,000 public comments, the Department of Labor issued a final rule that raised the minimum salary threshold to that same $47,476 per year. But 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 court said the White House improperly looked at salaries instead of job descriptions when determining who was eligible for overtime pay.

In March, Trump's Labor Department re-started the long process, and proposed to raise the rate at which overtime is paid to those who earn less than $35,308 per year. 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, lower pay levels. 

In Michigan alone, says the governor's office, approximately 192,000 working people would lose overtime protections that were guaranteed if Trump had kept the Obama pay threshold.  And that lower standard has lead directly to the loss of $56 million in overtime compensation the could have been earned by Michigan workers.

"The adoption of this new rule" by the Trump Administration, "would leave behind millions of workers who would have gotten overtime protections under the 2016 guidelines," said Heidi Schierholz of the labor-back Economic Policy Institute (EPI) "We strongly oppose this and any efforts to weaken the criteria set forth in the 2016 final rule for defining who qualifies for exemption from overtime protections. DOL does not need to undertake a new rulemaking - they just need to defend the 2016 rule, and support middle-class workers who badly need a raise."

The current proposal also allows employers to finagle their way out of paying overtime to some employees by designating them as management, even if they have no traditional management job description such as the ability to hire and fire, or set employee schedules or raises.

"The proposed rule departs from decades of historical precedent and undercuts the purposes of the Fair Labor Standards Act's overtime provisions," Whitmer wrote. "The department's overtime proposal simply does not do enough to restore overtime pay for workers in Michigan or establish the type of strong national standard that the department's overtime riles set in decades past."

Michigan AFL-CIO President Ron Bieber responded to Whitmer's stance defending the state's workers. “We appreciate Governor Whitmer speaking out on behalf of the working people of Michigan and the rest of the country. The overtime pay eligibility rules proposed by the Trump Administration are a drastic reduction from what was initially proposed by the Obama Administration. When people are away from their families working longer hours, they should be fairly compensated. The rules proposed by the current administration in Washington leaves out too many people and hurts working families who are just trying to make ends meet.”