Friday, November 25, 2016

Update - judge blocks overtime pay rule

A few days ago I blogged about how Republicans were firmly against an Obama rule that would have required time-and-a-half overtime pay for millions of American workers earning less than $47,000: Make America Broke Again - Millions of Trump voters to lose overtime pay. I expected Donald Trump to cancel that rule given his promises to undo everything Obama has done - even if it hurts Trump’s base of blue-collar white workers.

Now it turns out that Trump may be in the position of resurrecting Obama’s rule because a federal judge has done the dirty work of voiding the overtime rule. Here’s the NY Times editorial board’s take on it: No Extra Pay for Extra Work.

The issue

The employees who will be hurt by the ruling typically earn low-to-modest salaries in jobs at retail stores, hotels, call centers and other service-sector businesses. Unless their bosses decide otherwise, they will continue to work without overtime pay for anything beyond 40 hours a week.

Federal overtime law, which dates back to 1938, never intended that result. The law has always been clear that an employer does not have to pay salaried workers time and a half for overtime if those workers earn enough to qualify as executives, professionals or administrators. The problem is that the $455-a-week threshold at which workers qualify for white-collar status has not been fully updated for inflation since 1975. As a result, the share of the work force eligible for overtime has dropped, from about 60 percent in 1975 to 7 percent today.

The updated rules the judge blocked would have raised the threshold to $913 a week, about where it would have been if it had kept pace with inflation. In all, about one-third of salaried employees would have been eligible for overtime under the new threshold.

What the judge did

In blocking the rule, Judge Amos Mazzant III agreed with a coalition of states and businesses that the Labor Department had overstepped its authority. He said the law does not allow the Labor Department to decide which employees are eligible for overtime based on salary level alone.

This was a twisted reading of the law and history. There are various tests that can be applied to determine whether a salaried employee is eligible for overtime. But salary alone can determine the answer. If an employer does not pay an employee a salary equal or above the threshold, the employee is entitled to time and a half for overtime, period.

What can be done and by whom

President-elect Donald Trump indicated during the campaign that new rules on overtime should include exemptions for small businesses, a stance that leaves him room to maneuver. He could defend updated overtime standards and still support legislation with the limited carve-out he suggested. Doing so would mean defying congressional Republicans who opposed the new overtime rule, as well as opposing every other pro-worker labor reform of the Obama era. But it would also mean he is paying attention to the needs of the working people who elected him.

For millions of Americans, there will be no extra pay for extra work anytime soon — unless Mr. Trump makes it happen.

If Democrats want to get on the side of American workers this would seem to be one area in which to push. As the Times’ board put it, “The judge’s ruling is a triumph for economic injustice and income inequality.” That should be one of our calls to action.

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