CHN: Labor Department Issues Proposals that Could Harm Workers

The Department of Labor (DOL) this spring issued several proposed rules that advocates believe will have a negative impact on workers.

One such rule focuses on which workers are entitled to overtime pay and protections. Under current law, both salary level and duties are taken into account to determine if a salaried (non-hourly) worker qualifies for overtime pay. In 2016, under the Obama Administration, the Department of Labor attempted to strengthen overtime regulations for working people by raising the annual salary threshold under which most workers are entitled to overtime pay from $23,660 to $47,476 and then indexing it to wage growth. The salary threshold has only been increased once since 1975 – in 2004, when it was set at a level that fell far short of fully adjusting it for inflation. Had the salary threshold increased at the inflation rate from 1975 to 2020, it would be projected to rise to $58,000, more than the Obama Administration’s proposal would have called for. The new rule, proposed by the Trump DOL, sets the threshold at $35,308 in 2020, nearly $23,000 less than the inflation-adjusted 1975 level, according to the Economic Policy Institute (EPI). EPI estimates that Obama rule would have benefited 13.5 million working people ― making 4.6 million newly eligible to receive the overtime pay they deserve, and strengthening the rights of 8.9 million more.

The Obama rule was challenged by business interests and blocked in the courts, however, and the Trump Administration refused to defend the updated rule. Research shows that this inaction has already cost working people more than $1.6 billion in lost overtime pay.

In opposing the Trump rule, advocates point to research from EPI that shows that this proposal would leave behind 8.2 million people who would have gotten new or strengthened overtime protections under the 2016 guidelines, and that the annual wage gains workers receive would be $1.2 billion less under the new proposal compared to the 2016 rule.

The Department of Labor is accepting comments through May 21. For more information, see these pieces from CHN members the Economic Policy Institute, the National Employment Law Project, and the National Women’s Law Center.

In addition, on April 1, DOL issued a proposed rule that would negatively affect workers in contracted jobs. Currently, when a company contracts out work to a staffing firm or other labor subcontractor, it may still share responsibility for the workers, which helps ensure the lead company provides better oversight of and compliance with minimum wage, child labor, and overtime protections. According to the National Employment Law Project (NELP), the new DOL guidance on the so-called “joint employer” standard “lets large corporations that outsource jobs off the hook, leaving typically smaller and poorly capitalized local businesses holding the bag for violations. The DOL proposal would make it harder for workers to enforce wage and hour laws and will encourage more outsourcing to labor contractors like temp and staffing firms, especially in low-wage sectors such as construction, agriculture, garment, janitorial, home care, delivery and logistics, warehousing, and manufacturing.” The Department of Labor is accepting comments through June 25.