EPI Policy Director Heidi Shierholz submitted comments today opposing the Labor Department’s proposal to set the threshold under which salaried workers are guaranteed overtime to $35,308 for a full-year worker. Shierholz’s analysis shows that this proposal does not go far enough to protect working people—leaving behind millions of workers who would have been covered by a 2016 Obama administration proposal. In her comment, Shierholz makes the case that DOL uses an inappropriate methodology to set the salary threshold in its proposal, while the 2016 rule this would supplant used a more appropriate—albeit conservative—methodology.
“The 2016 threshold was painstakingly researched and economically justified. The department’s new proposed rule is based on a deeply flawed set of assumptions, including the notion that someone struggling on $35,000 a year is a highly paid executive who doesn’t need or deserve overtime protections, and will leave millions of workers behind as a result,” said Shierholz. “We encourage the department to drop this rulemaking and instead defend the 2016 threshold.”
Shierholz points out that the Labor Department neglected to include automatic increases in its proposal. Without automatic updates, millions of workers will be left behind as the threshold is eroded by inflation. Instead of indexing the threshold to an appropriate benchmark, DOL has indicated that they intend to undertake a new rulemaking process, which is a costly and time-consuming process, every four years to update the threshold. Even if the department followed through with this commitment, the threshold would not be updated regularly enough and employers and employees alike would be forced to deal with extra uncertainty.
Shierholz’s analysis shows that 8.2 million workers who would have benefitted from the 2016 final rule will be left behind by this proposal—far more than estimated by DOL. This includes 4.2 million women, 3.0 million people of color, 4.7 million workers without a college degree, and 2.7 million parents of children under the age of 18. The 8.2 million workers left behind by this proposal are comprised of 3.1 million workers who would have gotten new overtime protections under the 2016 rule, and another 5.1 million workers who would have gotten strengthened overtime protections under that rule.