The Labor Department has announced a new proposal that would extend overtime pay to millions of Americans, according to the Economic Policy Institute. The proposal would set the income threshold under which workers are required get overtime to $35,308 a year. This sounds good, but it’s significantly worse than the proposal the department suggested in 2016, under Obama, which would have set the threshold at $47,476.
At the end 2016, the rule extending overtime pay to workers who make $47,476 a year or less went into effect, but it was quickly undermined by a court challenge from business associations. That rule was the result of two years of work from the Labor Department, including meetings with 200 organizations, and input from over 250,000 public comments. The threshold was intended to be raised every three years from the time of it’s implementation.
Sadly, the 2016 law was never enforced, because from the time it was announced the Trump administration was clear that they intended to weaken the law.
But even this Obama-era rule was weak in comparison to past overtime protections. According to EPI, in the 1975, over 60 percent of all salaried workers qualified for mandatory overtime pay—the threshold at that time, adjusted for inflation, would be $55,000 today.
By 2016, the percentage of Americans whose salary qualified for overtime had plummeted to 7 percent. The new rules created by the Obama administration would have upped that number to about 33 percent.
From EPI (emphasis theirs):
Despite the painstaking determination of the threshold in the 2016 rule and the fact that that threshold is well within historical norms, the Trump administration is about to publish a rule with a dramatically lower threshold. A preliminary calculation suggests that well over half of the workers who would have gotten new or strengthened overtime protections under the 2016 rule would be left behind by this rule. That means this administration is effectively turning its back on millions of workers. Trump and his cabinet are again siding with corporate interests over those of working people
This represents a huge blow to middle class American workers, many of whom voted for Trump.
Of course, most employees who work hourly are entitled to overtime. But these 2016 laws were a big deal for middle class salaried workers. The rules would have protected them from greedy bosses who don’t want to follow industry norms for overtime. And while Trump is likely to spin this as a win for workers, it’s actually a loss compared to the deal they would have received if he had just stuck to Obama’s recommendations.