Recapping a great week for workers

Last Friday, the United Auto Workers (UAW) scored a historic win in the South after a decade-long campaign to organize a Volkswagen plant in Tennessee. The UAW is hoping momentum from the Volkswagen vote as well as last year’s successful strike at the “Big Three” automakers will help them win representation at a Mercedes-Benz plant in Alabama next month.

Meanwhile, this week the Biden administration announced four long-awaited protections for workers that have been EPI policy priorities:  

On Monday, the Centers for Medicare and Medicaid Services for the first time issued a final rule requiring nursing homes to provide minimum hours of nursing care per resident (3.48 hours) and to have a registered nurse available around the clock. In addition to protecting residents, the rule will improve the lives of underpaid and overworked nursing home workers and reduce staff turnover that exceeds 50% annually.

Taxpayers pay for 71% of long-term services and supports, mostly in the form of Medicaid and Medicare spending on nursing home care. But there was no federal standard requiring nursing homes to provide minimum hours of care per resident until the Biden administration followed through on a pledge to curb abuses by for-profit operators who dominate the industry (government and non-profit homes provide better care). The industry lobby fiercely contested the rule, claiming a shortage of workers—a claim belied by the fact that nursing homes pay less than other health care providers (a real shortage of workers would drive up pay).

On Tuesday, the Federal Trade Commission (FTC) issued a final rule banning most noncompete agreements for workers. Employers justify noncompete agreements that tie workers to specific employers as a means of protecting trade secrets, but most affected workers do not have access to proprietary information or they are covered by nondisclosure agreements. Noncompete agreements, which now cover at least 30 million workers according to research by EPI and others cited by the FTC, suppress wages by making it hard for workers to move to better jobs, and squelch competition by preventing workers from starting businesses.

Also on Tuesday, the Department of Labor (DOL) issued a final rule raising the minimum salary threshold for workers who can be exempt from earning overtime pay. The threshold will be raised in two steps to $58,656 for full-time workers, after which it will be adjusted every three years. In research cited by DOL, EPI found that the threshold covered 63% of salaried workers in 1975 but only 9% in 2023. DOL and EPI estimated that roughly 4 million workers—disproportionately women and workers of color—will be helped by the new rule.

In a third Tuesday announcement, DOL issued a final rule closing loopholes in rules protecting retirement savers from conflicts of interest in investment advice. The rule ensures that advice offered on rollovers to Individual Retirement Accounts, advice on the sale of insurance products, and advice to retirement plan sponsors is in the best interest of retirement savers, in line with rules protecting retirement savers from conflicted advice in other contexts. Like the overtime rule, this rule has been many years in the making. An Obama-era rule extending fiduciary protections to retirement savers was delayed by the Trump administration and subsequently overturned by the conservative Fifth Circuit Court of Appeals. The Securities and Exchange Commission stepped in with a “Best Interest” rule, but left gaps exploited by unscrupulous financial professionals—in part due to jurisdictional limits that, for example, allowed insurance companies to market costly and complex annuities to vulnerable seniors, at an estimated cost to retirement savers of $5.5 billion or more per year (total savings from the rule are hard to assess but much higher).

These common-sense actions will improve protections for workers and are important steps toward creating a fair and sustainable economy.