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News from EPI EPI submits comments to DOL on overtime rule: The 2016 overtime rule updated a critical labor standard for working families

EPI Policy Director Heidi Shierholz filed comments today with the Department of Labor in response to a Request for Information (RFI) on the overtime pay rule. Shierholz writes that that the 2016 update to the rule was critically needed because the overtime threshold—under which workers were guaranteed time-and-a-half for working more than forty hours a week—had been allowed to erode dramatically, and urges DOL not to weaken the rule.

In 1975, the threshold was at a level such that it covered nearly half of all salaried workers (who were thus eligible for overtime based on their salary), but by 2014, that share had eroded to less than 10 percent. The erosion in the threshold was due to two key factors. Because the threshold was raised only once since 1975, an increasing share of the workforce was exempted as wages rose throughout the economy. At the same time, when the rule was updated in 2004, the standard determining if workers qualified as “executives, administrators, or professionals” (and thus could be exempted from overtime requirements) was significantly loosened. This, combined with a still-low salary threshold, meant that the 2004 overtime rule exempted a much larger share of the workforce than Congress intended when they passed the Fair Labor Standards Act nearly 80 years ago.

“The salary threshold and the duties test work in tandem. If the salary threshold is reduced, the duties test must be strengthened,” said Shierholz.

The 2016 rule would provide new or strengthened overtime protections to roughly 12.5 million workers, correcting these two sources of erosion in the threshold.

Shierholz makes clear that neither the methodology nor the salary threshold from the 2004 rule are meaningful or appropriate foundations for future rulemaking. However, Secretary of Labor Alexander Acosta and Texas Judge Amos Mazzant—who found the updated rule invalid—have referenced using the flawed 2004 rule as a base for a weaker overtime rule. DOL has until October 30 to decide whether to appeal Mazzant’s ruling, which EPI has strongly urged that they do.

“Millions of American workers would benefit if the 2016 overtime rule was fully implemented and enforced,” said Shierholz. “This RFI is clearly an effort to weaken or kill the updated rule, which, if successful, will mean millions of middle-class workers not getting paid for their hard work.”

Critical of efforts to delay, weaken, or kill the overtime rule update, Shierholz explains that any designation of an overtime pay threshold lower than the 2016 rule of $47,476 would require a much more rigorous duties test. Furthermore, Shierholz writes, the overtime salary threshold should be automatically updated on a periodic basis to keep it from once more being eroded.

“The 2016 rule was the result of an exhaustive, more than two-year rulemaking process. During this process, DOL met with more than 200 organizations on all sides of the issue,” said Shierholz. “The department also received and reviewed over a quarter million public comments. We strongly oppose any efforts to weaken the painstakingly determined criteria set forth in the 2016 final rule for defining who qualifies for exemption from overtime protections.”

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