In 2016. the Department of Labor passed a rule expanding salaried workers’ right to receive overtime pay. According to reports, the Trump administration is preparing to gut that Obama-era protection.
Under the original rule, all salaried workers making less than $47,476 per year would get overtime pay when working more than 40 hours per week. This requirement would be indexed to inflation. Most hourly workers, regardless of annual wage, already receive overtime benefits.
This was actually not covering as many workers as overtime rules once did. It would’ve covered only a third of workers, while almost two-thirds were covered in 1975. If the 1975 rules matched inflation, the threshold today would be closer to $55,000 a year.
Over roughly the same time, wages have only risen 12 percent, despite a 77 percent rise in overall productivity.
Which makes the Trump proposal of $35,000 a devastating cut, and less like the gain that it has been touted as being. The Trump policy lacks a guarantee that it would be indexed to inflation as well.
This means that if a salaried worker makes more than $35,000 but less than $47,000 the Trump rule actually blocks the overtime protections that the worker would’ve received under the original rule.
And not even the Trump rule is a done deal. It could be challenged in court, like the Obama-era rule before it. Business groups that managed to halt the Obama-era overtime rule are equally wary of the watered-down Trump-era policy, according to Bloomberg. The Trump policy might also face challenges from labor groups angry at the drastic reduction in protections.
“We strongly oppose this and any efforts to weaken the criteria set forth in the 2016 final rule for defining who qualifies for exemption from overtime protections,” wrote the Economic Policy Institute Director of Policy Heidi Shierholz in a statement. “[The Department of Labor] does not need to undertake a new rulemaking—they just need to defend the 2016 rule, and support middle-class workers who badly need a raise.”
It should be noted that a number of the businesses closely watching the new Trump-era version of the rule like Chipotle, Bank of America and T-Mobile are engaged in lawsuits over unpaid overtime already, and CBS Television Studios settled one such suit recently.
Currently, salaried workers are only promised overtime if they make less than $24,000 per year.
Katelyn Kivel is a contributing editor and senior legal reporter for Grit Post in Kalamazoo, Michigan. Follow her on Twitter @KatelynKivel.