Soon, the Labor Department under the Trump administration will release its final rule on worker overtime. They may have already done it. Rumor was the administration planned to showcase the rule around Labor Day and claim they are taking steps to make more workers eligible for overtime pay.
Don’t be fooled! Workers would lose billions under this rule.
In 2016, Democratic President Barack Obama’s Labor Department proposed doubling the limit to $47,476 which would have allowed overtime pay to everyone earning below that.
But right-wing states convinced a GOP-named federal judge in rural red-state Texas to throw out Obama’s proposal. The next year, at Trump’s orders, his Department of Labor dumped the $47,476 level.
Instead Trump Labor Secretary Alex Acosta has proposed raising the limit to $35,308 annually from its current $25,660. That would add a million workers to the numbers eligible for overtime pay, Acosta said.
However — and this is the key issue —it will leave millions more workers ineligible for overtime – whom Obama’s overtime pay rule would have covered.
It’s useful to note that if the rule had simply been adjusted for inflation since 1975, the level at which a worker earning less would be eligible for overtime would be $56,500. This is more than $20,000 higher than the Trump administration’s proposed new level!
8.2 MILLION WORKERS WILL LOSE OUT
The true impact of the Trump administration’s weaker rule:
- An estimated 8.2 million workers would be left behind by the Trump proposal.
- The 8.2 million workers left behind by the Trump proposal include 3.1 million workers who would have gotten new overtime protections under the 2016 rule and 5.1 million workers who would have gotten strengthened protections under the 2016 rule.
- The 8.2 million workers who would be left behind include 4.2 million women, 3.0 million people of color, 4.7 million workers without a college degree, and 2.7 million parents of children under the age of 18.
- Because the Trump proposal does not automatically index the threshold going forward, the number of workers left behind grows from 8.2 million in 2020 to an estimated 11.5 million over the first 10 years of implementation.
- The annual wage gains from workers who get new protections are $1.2 billion dollars less under the Trump proposal than under the 2016 rule. These annual earnings losses will grow from $1.2 billion to $1.6 billion (in inflation-adjusted terms) over the first 10 years of implementation due to the fact that the Trump administration proposal does not include automatic indexing.
THROWS WORKERS UNDER THE BUS
So, if you hear the Trump administration touting how many workers will gain overtime protections under its new rule, remember the truth: instead of defending the original Obama rule that would have provided protections to millions more, the administration threw those workers under the bus and wrote a dramatically watered-down rule that appealed to the corporate executives whose interests this administration holds dear.