Court Ruling and Trump's Election Puts Overtime Pay Rules in Limbo

Obama effort for workers at risk

If one listens to the right's propaganda that white working class voters supported Donald Trump due to economic concerns rather than their allegiance to Trump's calls to racism, white supremacy, anti-immigrant bigotry, and general misogyny, then one would think that these voters would have applauded and supported the Obama administration's plan to change the Department of Labor's overtime rules.  These changes would have forced employers with "salaried" workers to pay overtime to staff making less than a designated annual salary.   Prior to the rule changes, many employers - it is a practice widely seen in the legal services realm for paralegals and real estate processors  - designated employees as salaried staff exempt from hourly wage overtime rules and then demanded that they work 60+ hours a week.  Between a conservative court ruling and Trump's election, the new rules are on hold and likely face repeal if Trump holds true to his pledge to undo Obama's legacy. Meanwhile, many working class and low level professional workers will find themselves making less money for longer hours once again. It's yet another example of Trump voters cutting their own economic throats. Here are highlights from a piece in the Washington Post looks at this potentially additional self-inflicted harm:

As an education specialist for a museum in Kansas City, Mo., Cherie Kelly says it can be tough to keep her work schedule to 40 hours a week.

On weeks with evening events or special programming, she might have to put in closer to 60 hours — something she says happens about once a month. She was looking forward to earning some extra money through overtime pay soon, thanks to a federal rule that was slated to kick in this week.

But she and many other workers are now in limbo after a federal judge in Texas ruled last week to halt an overtime rulethat was supposed to take effect Dec. 1.

The Labor Department rule, which would have made overtime pay available to more than 4 million additional workers, was challenged in court by a number of business groups and a collection of states. The judge ruled that the department exceeded its authority when it more than doubled the salary limit that determines which workers should be made eligible for overtime pay.

The rule would have made overtime pay an option for full-time salaried employees earning up to $47,476 a year — substantially more than the current threshold of $23,660 a year. The rule hadn’t been updated in 12 years.

But business groups, states and other employers expressed concerns that the higher income threshold would hurt their bottom lines, disrupt their business models, or limit opportunities for employees.

The Labor Department said it strongly disagreed with the court’s decision and is currently reviewing its legal options.

The timeline for when the court will reach a final decision depends on what the department does next, legal experts say. If the Labor Department challenges the injunction as expected, some consumer groups said they are worried that the rule advocated by President Obama may not survive under the next administration. One scenario is that the Labor Department under President-elect Donald Trump could decide to drop the case, putting an end to the rule, says Ross Eisenbrey, vice president for the Economic Policy Institute, a left-leaning think tank.

As a result, Eisenbrey said, the institute is researching options for becoming a party in the lawsuit so that it could continue the case even if the Labor Department drops out.

Many employers said after the ruling that they would move ahead with changes even though the future of the rule is murky. TJX, the parent company for T.J. Maxx and Marshalls, said this week that it would “move forward as planned” in implementing the changes required by the rule, without elaborating on what those changes would be. Walmart in September raised the salaries of its entry-level managers to $48,500 from $45,000 to bring them above the threshold for overtime pay and said this week it has no plans to change course.

 If the Trump/GOP plan plays out, these working class Trump voters could see a loss of their health care coverage, a gutting of Medicare, and reduced pay.  They say they wanted change, and they will certainly get it if all of this comes to pass.  As noted before, I have ZERO sympathy for these morons who rallied to a message of hate and bigotry and were too lazy and/or stupid to educate themselves about what Trump and the GOP actually had planned. They deserve every misfortune imaginable.  I feel sorrow only for their children who will likely suffer significantly.

20 Million Trump Voters’ Could Lose Ovetime Pay

St. Louis Trump supporters

The examples of Trump voters putting appeals to their racism and bigotry ahead of their own economic interest keep on rolling in.  The latest comes via a story at The Raw Story that looks at likely pay losses that will be suffered by Trump supporters if  Der Fuhrer Donald Trump and the Congressional Republicans keep their promise to repeal a number of executive orders signed by President Barack Obama.  I would be lying if I said I had a shred of sympathy for these people, but I do feel badly for others who will be negatively impacted if this reverse Robin Hood agenda is implemented.  Here are excerpts:

Millions of Americans who voted for Donald Trump are expected to lose overtime pay rights soon after he is sworn in as president.

Tom Bonier, CEO of the polling firm Targetsmart, pointed out on Monday that “almost 20,000,000 Trump voters would lose time and a half overtime” under a Republican plan to reverse regulations put in place by President Barack Obama.
 According to Politico, House Republicans are already plotting the most efficient way to dismantle Obama-era regulations. An overtime rule requiring companies to pay time-and-a-half to workers who make less than $47,000 a year is expected to be one of the first reversals.

“We have heard over the past year that it would have truly dramatically bad effects, not just on employers but on employees across the country,” Rep. Bradley Byrne (R-AL) told Politico. “I can give you the names of a ton of private-sector businesses who will either have to eat that cost or pass that cost on to their customers.”

Exit polls taken during the Nov. 8 election showed that 41 percent of Trump’s 61 million votes were cast by people who make less than $50,000 a year.

I hope these bigots and "low information voters" enjoy losing overtime pay and having to work 70 hour weeks as "salaried" employees.  Oh, and when they lose their healthcare coverage, that will make for a much deserved double whammy.  

Labor Department Rule Change to Bringing Overtime Pay To Millions Of Workers

One standard way for employers to get around overtime pay (and perhaps even minimum wage requirements) for their employees has been to treat them as salaried employees rather than hourly employees who are subject to minimum wage and overtime pay rules.  Recognizing this, the Labor Department had previously set a threshold for salary incomes below which the overtime pay rules would be triggered.  However, until now, that threshold has been a pathetic $23,660.00.  Now, that threshold will be increased to $47,476.  Expect shrieks and screams from Republicans and those who want to bring back the bad old days of the falsely named Gilded Age.  A piece in Huffington Post looks at this change that may positively impact millions of Americans.  Here are article highlights:

The Labor Department announced Tuesday that it completed one of the most ambitious economic reforms of the Obama era, finalizing a new rule that will extend overtime protections to millions of additional workers.

The administration will accomplish that by raising what’s known as the overtime salary threshold. Nearly all workers earning salaries beneath that threshold are entitled to time-and-a-half pay whenever they work more than 40 hours in a week.

The current threshold is just $23,660. The White House will be doubling that number, to $47,476, guaranteeing overtime rights for salaried workers earning less than that. The Labor Department will now update the threshold every three years to make sure it keeps pace with inflation.

The White House estimates that the change will bring overtime rights to 4.2 million workers who are currently excluded. It will also clarify eligibility for another 8.9 million workers who may or may not have overtime protections under the current rules, officials said.

On a call with reporters Tuesday, Labor Secretary Tom Perez said the reform was meant to address “both underpay and overwork.”

With a minimum wage hike blocked on Capitol Hill, expanding overtime was the most aggressive way for the Obama administration to raise wages for private-sector workers. The White House is making the reforms through the executive rule-making process, under the Fair Labor Standards Act. It doesn’t need congressional approval to do so, although Republicans may still try to block the reforms through the appropriations process.

Passed during the Great Depression, America’s overtime law was meant to protect workers from being worked too long and paid too little. The rules guarantee that workers get paid extra when they work extra. The rules also discourage employers from working employees long hours by making it more expensive to do so, through a time-and-a-half premium.

But under the current regulations, many working-class employees who earn above the low salary threshold are classified as “managers” and therefore don’t have overtime rights. Employers have an incentive to pile work onto these employees, since their extra time essentially comes for free. As a result, in retail some store managers will clock 60, 70 or even 80 hours, but only take home a modest salary in the $30,000 range.

In 1975, 62 percent of salaried workers had overtime rights; now, that share is a mere 7 percent, according to White House estimates.   “And you wonder why the middle class is struggling,” Vice President Joe Biden said Tuesday. “If you work overtime you should actually get paid for working overtime.”

“Overworked and underpaid managers, postdoctoral researchers, social workers, insurance claims workers, and many others will have their lives improved one way or another by this rule,” said Eisenbrey, who was one of the most vocal voices for the reform. “It’s great to see the government doing something significant to help the struggling middle class.”

EPI estimates that the effects could be greater than the White House anticipates. The group projects that 12.5 million workers will “directly benefit” from the new rules — slightly more than half of them women, and a disproportionate share of them African-American and Hispanic. The biggest effects will be felt in the South, where a larger share of workers are carved out of protections under the current rules.

Business groups lobbied hard against the new rules, claiming they would lead employers to cut back on hours, and force workers to start tracking their time as hourly employees. What the rules will undoubtedly do is give many employers a hard choice: Either limit workers’ hours to 40 per week so they don’t incur the time-and-a-half premium, or start paying workers more for the extra time they work.

What Republicans and business groups seem to never contemplate is that if workers have increased income, they will spend much of it in the marketplace and boost the economy - and the demand for goods and services.  It is not a zero sum game. I can think of many law firms and title companies that may need to revisit their wage practises.