Finalized Overtime Rule Leaves Out Millions of Working People

Finalized Overtime Rule Leaves Out Millions of Working People

The Trump administration announced its final overtime rule on Sept. 24, ending a yearslong process that sought to undo the original, more generous, 2016 rule.

“This was an unnecessary exercise in watered-down rule making,” said International President Lonnie R. Stephenson. “While a lot of families will benefit from this, many more will not, and for no good reason.”

The finalized rule expands the threshold under which workers can be eligible for overtime pay from $23,000 a year to $35,568. This increase means that 1.3 million more working people can now earn 50% more when they work more than 40 hours a week. The change goes into effect on Jan. 1, 2020.

It’s far below the original rule though, which would have raised the threshold to $47,476 and index it to inflation, allowing for increases as the cost of living goes up.

The original rule came out of the Obama administration in 2016 but business groups and 21 Republican-controlled states sued and a district court judge in Texas stopped it from going into effect.

As the Economic Policy Institute’s Heidi Shierholz noted, the Trump administration didn’t need to create a new rule. They could have defended the 2016 one, which was exhaustively researched. But they didn’t.

“While the administration may be trumpeting this rule as a good thing for workers, that is a ruse,” Shierholz wrote. “In reality, the rule leaves behind millions of workers who would have received overtime protections under the much stronger rule, published in 2016, that Trump administration abandoned.”

Shierholz estimates that roughly 8.2 million working people would have benefitted from the 2016 version but are now left out. EPI also noted that if the rule had simply been adjusted for inflation since 1975, the threshold would be about $56,500. In 1975 more than 60% of full-time salaried workers qualified for overtime. By 2016, that number had plummeted to only 7%.

“President Trump reversed a good policy and took away money from 8.2 million middle-class workers today. That’s cruel,” said Rep. Donald Norcross of New Jersey. “Currently, Americans with modest salaries are working unlimited hours with limited salaries. While President Obama set out to raise the threshold, today, thanks to Trump, millions will remain uncompensated for their labor.”

Norcross is a member of Folsom, N.J., Local 351.

The overtime rule is the latest in a series of Obama-era regulations that the Trump administration has rolled back. The Department of Labor has delayed the fiduciary rule, which required financial advisors to act in the best interest of their clients, and rescinded the persuader rule which granted more transparency to union election campaigns. The National Labor Relations Board has been on a similar tear, throwing out pro-worker rulings left and right – including five in just one week.

“At every turn, it seems, this administration has sided with corporate interests at the expense of working families,” Stephenson said. “Whether its overtime pay, the right to organize your workplace or the right to get sound retirement advice, this administration is making it very clear where their interests lie, and it’s not with average Americans.”

The overtime rule came just days before Eugene Scalia was confirmed as the new Secretary of Labor. Scalia, the son of former U.S. Supreme Court Justice Antonin Scalia, has spent his career working to safeguard corporate interests, oftentimes in opposition to the rights of working people.

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