By Celine McNicholas, Economic Policy Institute
Monday, July 24 marked eight years since the federal minimum wage was raised from $6.55 to $7.25. While the anniversary passed with little fanfare, the Trump administration chose Monday to issue a Request for Information(RFI) in an effort to weaken or kill the Department of Labor’s (DOL) 2016 update to the overtime rule. On Wednesday, the Trump Department of Justice (DOJ) filed a brief arguing that Title VII does not protect employees from discrimination based on sexual orientation. On Thursday, Members of Congress introduced a bill to weaken the joint employer standard under both the Fair Labor Standards Act and the National Labor Relations Act. And throughout the week, Senate Republicans continued their never-ending attempt to repeal the Affordable Care Act, with the effort ultimately failing early this morning.
Minimum wage anniversary
It has now been more than eight years since the federal minimum wage was last raised. Over this time, the purchasing power of the federal minimum wage has fallen by over 12 percent. Had the minimum wage kept pace with productivity since the late 1960s, it would be over $19 per hour today. With action on the federal level stalled, many states and municipalities have raised their minimum wages, but there are still 21 states where the minimum wage is stuck at $7.25. If policymakers raised the federal minimum wage to $15 by 2024, 41 million American workers would benefit.
Trump Department of Labor begins the process of weakening the overtime rule
In 1975, DOL set the salary level at which workers could be exempt from overtime to the equivalent of around $58,000 in today’s dollars. At that level, more than 50 percent of full-time salaried workers were covered. However, the salary threshold was not raised enough to keep up with wage growth or inflation, leaving millions of workers without protections by 2016.
The Obama administration issued a rule to raise the salary threshold, setting it at $47,476—high enough to cover about 34 percent of full-time salaried workers. The Trump administration has refused to fully implement and enforce the updated rule, first by deciding not to defend against a lawsuit attacking the rule and now by opening up a wasteful RFI. The RFI asks for input on a number of factors, such as whether there should be multiple standards based on geography or job duties. National wage standards ensure decent basic standards for all workers, and the updated rule had already set a salary threshold linked to the lowest-wage Census region. Workers’ wages should not be undercut even further by weakening the salary threshold.
Legislation to weaken joint employer standard
Yesterday, House Republicans (and two Democrats) introduced the “Save Local Business Act,” which would weaken the joint employer standard under both the National Labor Relations Act (NLRA) and the Fair Labor Standards Act (FLSA). Today, workers often find themselves subject to more than one employer. Contingent and alternative workforce arrangements have grown dramatically. Recent estimates find that the share of workers engaged in alternative work arrangements was 15.8 percent in late 2015. In today’s labor market, that translates into roughly 24 million workers. Workers deserve a joint employer standard that guarantees their rights and protections under the NLRA and the FLSA. Instead, this bill would make it nearly impossible for workers whose wages are stolen or who are fired for supporting a union to get justice.
Additionally, the bill does nothing to support local small businesses. Instead, the legislation would ensure that small businesses are solely responsible for business practices often mandated by large corporations such as franchisors, allowing big corporations to avoid liability for labor and employment violations.
Trump DOJ seeks to limit protections for workers
The Trump DOJ filed a brief with the U.S. Court of Appeals for the Second Circuit in the case Zarda v. Altitude Express in which DOJ argued that Title VII of the Civil Rights Act of 1964 does not protect workers from discrimination based on sexual orientation. Title VII is the nation’s primary law prohibiting employment discrimination on the basis of race, color, religion, sex, and national origin. The administration’s position that sexual orientation is not protected by Title VII is the opposite of the Equal Employment Opportunity Commission’s position in its brief in the case. Federal appeals courts have reached different conclusions on the scope of Title VII coverage in this area. Some states have enacted laws protecting workers from discrimination on the basis of sexual orientation, but there is no federal standard. With this filing, the Trump administration made its position clear. The Trump DOJ will argue against protections for workers on the basis of sexual orientation and in favor of an employer’s right to discriminate.
It is likely that the House will adjourn today for the August recess, but the Senate will be in session on Monday. Some reports suggest that President Trump is planning to begin a two-and-a-half week vacation August, beginning late next week. The Perkins Project Policy Watch will continue to track Congress and the Trump administration and provide information on how their actions impact our nation’s workers.