March 8, 2019
The Donald Trump administration is proposing a new overtime regulation that would protect at least 2.8 million fewer workers than the overtime regulation proposed by the Barack Obama administration in 2016.
The AFL-CIO and other overtime advocates had urged the Trump administration to implement the Obama administration’s overtime rule and defend it against a court challenge by business trade associations and Republican state governments, but the Trump administration has refused to do so.
The 2016 Obama administration’s proposal would raise the overtime threshold from $23,660 to $47,476. However, because the Obama rule provided for automatic updates of the threshold to keep overtime protections from being eroded by inflation, the threshold under the Obama rule would be $51,064 today and $55,000 in 2022.
By contrast, the Trump administration’s proposal sets the overtime threshold at $35,308 and does not provide for automatic updates. By the administration’s own estimates, 2.8 million fewer workers would be newly eligible for overtime in the first year of the new rule.
The way the overtime regulations work is like this: Salaried workers who make less than the threshold are automatically eligible for overtime protection, whereas salaried workers who make more than the threshold may or may not be eligible for overtime protection, depending on their job duties. The higher the overtime threshold, the more workers are under the threshold, the more workers are automatically protected, and the better it is for workers.
In 2016, it was estimated that the Obama overtime rule would extend overtime eligibility to 4.9 million workers and bring another 7.6 million workers who already are eligible for overtime below the threshold, thus making it harder for employers to deny them overtime protection. According to the Economic Policy Institute, under the Trump administration’s proposal less than half as many workers would be either newly eligible or brought below the threshold.
The Trump administration proposal is especially troubling because the Obama administration’s proposal was not overly generous to workers. Back in 1975, the administration of President Gerald Ford set the overtime salary threshold at more than $55,000 in today’s dollars. The erosion of overtime protections over the past few decades is one of the ways the rules of our economy have been rewritten to favor corporations over working people.
Working people desperately need a pay raise. We need overtime protection to ensure we get paid for all the hours we work and that we can spend more time with our families away from work.
As we have before, the AFL-CIO will again urge the Trump administration to implement the Obama overtime rule and defend it in court. The Labor Department does not need to propose a new overtime rule; it just needs to defend the Obama administration’s 2016 proposal.