Rule Change on Overtime Marks Small Boost for Workers

WASHINGTON (CN) — Watering down an Obama-era proposal, the Department of Labor finalized a rule Tuesday that will open up overtime wages to an additional 1.3 million Americans beginning in 2020.

Since 2004, companies have been required to pay time and a half to any salaried workers earning less than $23,660 a year for any additional hours past 40 hours per week. Tuesday’s rule change bumps that threshold meanwhile to $35,568 a year, a good deal lower than the $47,000 figure introduced by the Obama administration in 2014 to address changes in the cost of living.

Obama’s rule would have made 5 million more workers eligible, but it also falls short of expert figures. Using the 1975 overtime salary limit of $8,060 as a baseline, the Economic Policy Institute says workers should be eligible for overtime if they make under $50,440 today.

Christine Owens, the executive director of the National Employment Law Project, criticized Trump’s rule Tuesday.

“No one should be fooled by the Labor Department’s new overtime regulation,” Owens said in a statement. “It is not a pro-worker regulation, but rather, another gift to corporate America — one that will allow it to continue to require far too many workers in this country to work in excess of 40 hours per week without any additional compensation for doing so.”

Owens also criticized the Labor Department for refusing to index the salary threshold to automatically increase, as would have happened every three years under Obama’s proposal.

EPI economist Heidi Shierholz piled on as well, calling the rule a “ruse.” 

“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 wrote in a blogpost. “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.”

Acting Labor Secretary Patrick Pizzella meanwhile praised his department’s new rule for increasing the threshold for the first time in 15 years.

A federal judge in Texas blocked Obama’s rule two years ago, siding with numerous business groups and 21 Republican-run states that had claimed the administration did not have the authority to make this shift.

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