Republicans (and Two Democrats) in Congress Want to Derail Commonsense Protections for Workers
By Ross Eisenbrey, Economic Policy Institute
Dozens of Republican members of Congress and two Democrats—Collin Peterson (D-Minn.) and Brad Ashford (D-Neb.)—have signed a letter to Secretary of Labor Thomas Perez about the Department of Labor’s (DOL) proposed rule on overtime pay for salaried employees, calling on him “to reconsider moving forward with this rule as drafted.” Oddly, a good part of the letter complains about provisions that are not in the proposed rule “as drafted.” The signers should be thanking the secretary, rather than complaining.
In particular, the letter complains that even though the proposed rule makes no change in the current regulation’s “duties test,” which identifies whether an employee’s job duties are those of an executive, professional, or administrative employee who might be exempt from overtime pay, the secretary does not spell out his future intentions. The signers worry, for example, that DOL is considering a common-sense tightening of the test to limit exemptions to employees who spend most of their time engaged in exempt duties. (The current duties test allows exemption of employees who spend nearly 100 percent of their time doing routine chores such as serving customers, running a cash register, stocking shelves, sweeping floors, and cleaning bathrooms.)
But, for better or worse, that change is not in the rule “as drafted.”
What is in the rule, which the members of Congress who signed the letter don’t like, is a long overdue increase in the salary an employee must be paid if an employer wants to avoid paying overtime. The current rule sets that exemption threshold at $23,660 a year—below the poverty line for a family of four. The proposed rule, as the representatives note, “would raise the salary threshold and require employers to pay overtime for all employees who make $50,440 or less per year.” The signers don’t like that, but the reasons they give don’t hold water.
The letter says the increase in the threshold would suddenly make 5 million employees eligible for overtime pay. That’s true, and it’s a good thing. Making employers pay their employees extra when they work more than 40 hours in a week is the purpose of the Fair Labor Standards Act. It’s good for those employees and their families, whether they get paid more or are simply allowed to spend more time with their families. And because it applies to all employers equally, it will not create competitive burdens.
The representatives claim the proposed salary threshold somehow fails to take into account the fact that “the purchasing power of a dollar is drastically different in various parts of our country.” But the claim is ridiculous. The point of the salary threshold is that workers paid less than this amount—even if they are classified by their employers as managers or executives—are automatically entitled to overtime protections. Essentially, this threshold separates workers with genuine managerial and professional responsibility, who have substantial autonomy over their work schedule and have real bargaining clout with their employers, from those workers who are simply labeled “managers” (often by employers precisely looking to avoid the obligation to pay overtime) but who nevertheless can be compelled to work long hours. While it’s true that prices differ across the country, the question is whether $50,440 is the minimum level that could be set across states to reasonably separate privileged managerial and executive employees from others. A conservative test would be that the salary threshold has to be high enough for the employee to be able to afford a middle class life, if not the lifestyle of an executive. Yet $50,440, the figure chosen by DOL, is barely sufficient to meet a basic family budget anywhere in the United States. Despite decades of productivity growth across the economy and extravagant increases in CEO pay, $50,440 is no more than the inflation-adjusted salary threshold set in 1975, and is significantly less in real dollars than the salary threshold set in 1970 by the Nixon administration.
Far from being a “major departure from previous DOL policy,” as the letter claims, the proposed rule fits squarely in DOL’s long tradition of setting the threshold to reflect what bona fide executives and professionals are actually paid, even in rural areas.
The members of Congress never say what salary threshold they think is appropriate. Each of them had an opportunity during the comment period to do what 300,000 other Americans did and submit a comment on the rule for the record, but few, if any, took advantage of the opportunity. The Secretary of Labor has an obligation to consider and respond to the comments made on the formal rule-making record. This last-minute political effort to derail the rule-making and deny a much-needed raise to millions of Americans does not deserve the same kind of attention.