News & Commentary

September 25, 2019

On Tuesday, the Department of Labor announced new rules that will require employers to pay overtime to workers making less than $35,500 per year. The rules, proposed in March, will take effect on January 1, 2020. Employers today are only required to pay overtime to workers making less than $23,600, a standard set in 2004 that covers approximately seven percent of salaried employees. The new rules will cover approximately 15 percent of salaried employees. (In 1975, by contrast, the overtime threshold covered 60 percent of salaried employees.)

Although the new rules are expected to provide overtime pay to 1.2 million additional workers, they benefit approximately 2.8 million fewer workers than rules proposed by the Obama administration in 2016 that would have required employers to pay overtime to workers making less than $47,000 per year. A federal judge in Texas halted implementation of the Obama rules in 2016, in response to lawsuits filed by the Chamber of Commerce and other business groups. In May, a group of 23 Democratic Senators urged the Department of Labor to defend the Obama rules, writing that “DOL is disingenuous in acting as though rescinding the final rule and proposing a weak rule are its only options; DOL can, instead, defend both the 2016 rule and the Secretary’s authority.” Judy Conti, a director at the National Employment Law Project, criticized the DOL’s decision to abandon the Obama rules. “The Trump administration is trying to portray this as some great gift to workers, but in fact it’s a rollback,” she said. “Nobody should be fooled into thinking this is pro-worker. What this does is it locks in a low threshold at the behest of the business community.”

Also on Tuesday, a group of contract technical workers in Google’s Pittsburg office voted to unionize with the United Steelworkers. (See Vail’s reporting on the vote here). The vote was 49 to 24, and will require certification by the NLRB. The workers will bargain with their employer—HCL America, not Google—but HCL America is likely to pass on increased costs to Google. “As with all our partners,” said Google spokeswoman Jenn Kaiser, “whether HCL’s employees unionize or not is between them and their employer. We’ll continue to partner with HCL.” Ben Gwin, an HCL contractor who works on Google Shopping, hopes that the union will be able to negotiate for paid parental leave. “As a single parent,” said Gwin, “I’m spread pretty thin; the more flexibility the better, so I can spend it with my daughter. She’s 12.”

A survey by the New York Fed, released Monday, shows that an increasing number of lower-income Americans are quitting their jobs and finding new ones. The survey found that 12% of heads of households making $60,000 a year or less had moved to new jobs in April, May, June, or July, while only 8% moved to new jobs in the same period last year. The change corresponded with an increase in job opportunities: about 4% of lower-income Americans received three job offers during the time period covered by the survey, while only 1.4% had received the same number of offers last year. Although some economists have heralded the survey as a sign of economic progress, the survey also found that more lower-income Americans moved from jobs into unemployment this year than last, and that lower-income workers had become increasingly dissatisfied with the opportunities for promotion offered by their current employers.



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