The Obama administration rule that sought to expand overtime eligibility for four million employees has been reduced drastically by the Trump administration, effectively slashing the proposed expansion for 2.8 million workers.
“The five-year fight to expand overtime pay to millions of workers is over.
The Department of Labor just released the final rule that will require businesses to pay overtime wages to a much larger group of employees if they work more than 40 hours a week. It’s a win for the estimated 1.3 million workers who will now be compensated for putting in long hours — but it’s a bitter defeat for the 2.8 million others who would’ve also gotten overtime under the original rule proposed by the Obama administration.
Up until now, only blue-collar workers and professionals who earn less than $23,000 a year can earn overtime pay under federal law, with some exceptions. That means they get paid 50 percent extra when they work more than 40 hours in a week. The new rule raises the salary threshold to $35,568. Unlike the original proposal, future changes to the threshold will not be tied to inflation.
In 2014, the Obama administration tried to double the threshold to include workers earning up to $47,000, tying future changes to the cost of living. The idea was that a dramatic expansion was needed because the government hasn’t raised the salary limit to keep up with inflation. For example, the $8,060 salary limit set in 1975 was the equivalent of about $50,440 in 2014 — far above the current $23,000 threshold. That means that over the years, more and more Americans have been working extra hours without getting paid for them, which is exactly what federal labor laws meant to prevent.
Obama’s decision to double the salary limit created quite an uproar. In brief, here’s what followed: Powerful business groups freaked out. They then joined 21 Republican-controlled states to sue the administration before the rule went into effect in 2016. The rule was put on hold during the legal dispute. A federal judge in Texas invalidated it in 2017, arguing that the Labor Department didn’t have the authority to make such a drastic change.
Companies were relieved, and workers were furious.
And instead of appealing the Texas court’s ruling in 2017, Trump’s labor secretary at the time, Alexander Acosta, said he would create a watered-down version of Obama’s rule. Now the agency is only lifting the salary limit from $23,000 to about $35,000 and scrapping the cost-of-living increases; that means about 2.8 million of the 4 million workers who expected to get overtime benefits won’t get them.”
For the rest of the story, visit Vox here.