“One of the many reasons reasons wages for American workers have stagnated is the “antiquated overtime threshold” said Douglas Hall, director of economic and fiscal policy the Economic Progress Institute. “Not only has the overtime threshold been stagnant since 2004, it’s never been meaningfully inflation adjusted since it was set in 1975.”
Hall was speaking at a United States Department of Labor (DOL) “listening session” in Providence Monday morning.
DOL plans to update the Part 541 white-collar exemption regulations, often referred to as the “Overtime Rule.” Issued under the Fair Labor Standards Act, these regulations implement exemptions from the overtime pay requirements for executive, administrative, professional, and certain other employees.
In May of 2016, DOL published a revised 2016 overtime rule which proposed an increase in overtime salary threshold levels, from $23,660 to $47,476 per year. In November 2016, Federal District Court Judge Amos Mazzan enjoined the rule, preventing DOL from implementing and enforcing it.
On August 21, 2017, the same court held that the final rule salary level exceeded DOL’s authority and concluded that the final rule is invalid. On October 30, 2017, DOL appealed that decision to the Fifth Circuit. However, at DOL’s request, the Fifth Circuit is holding the appeal in abeyance while DOL engages in rule making.
Hence a series of “listening sessions” held across the country by DOL. Providence was the last such session
Increasing the overtime threshold to the levels announced in 2016 “would benefit nearly 40,000 Rhode Island workers, increasing their pay or reducing the amount of paid work they are required to do,” said Hall. (See Video 14 below)
Overtime protections “prevent employees from being exploited by their employers. Under the status quo, too many workers are working long hours without being paid for many of those hour,” said Hall. “In fact, the status quo is laughable. To say that someone earning $24,000 is a manager is like ‘You’re a manger and you’re a manager and you’re a manager’ and none of them are eligible for overtime protections.”
Sarah Bratco, a lobbyist for the Rhode Island Hospitality Association (RIHA) who is usually seen advocating against the interests of workers at the Rhode Island General Assembly, was on hand to support a “common sense increase to the salary threshold.” (See Video 4 below)
“We would oppose the more than doubling with what the Obama era rule did. We believe the more appropriate level would be around $32,000 a year,” said Bratco.
This puts RIHA at odds with the Economic Policy institute. “We are urging the Department of Labor to vigorously defend the 2016 provisions,” said Hall. “Workers earning less than a poverty wage for a family of four should not be forced to work without pay.” The 2016 Rhode Island Standard of Need shows that a family of four needs about $58,000 a year.
Bratco was also concerned with potential adjustments to the “Duties Test.” Managers are supposed to manage workers, not do the job of workers. Yet in retail stores and restaurants, so-called managers oftentimes engage in stocking shelves, routine maintenance and other jobs that should properly go to hourly workers.
RIHA, said Bratco, opposes “setting any artificial cap on non-exempt work that managers would do. We believe that good managers are managers that lead by example and our industry depends on people being able to jump in and get the job done regardless of what their job title is.”
Each month, since the abandonment of the Obama-era threshold, Rhode Islanders have lost about $400,000 in wages, estimated the Center for American Progress and the Economic Policy Institute.
“This is money that could be helping those families,” said Hall. “They would spend that money locally in our economy, helping the Rhode Island economy to thrive and helping global businesses to prosper.”
DOL was seeking answers to the following questions at the listening session:
- -What is the appropriate salary level, or range of salary levels, exemptions for bona fide administrative or professional employees may apply?
- What benefits and costs to employees and employers might accompany an increased salary level?
- How will an increase salary level affect real wages?
- Could an increased salary level reduce litigation costs by reducing the number of employees whose exemption status is unclear?
- Could this additional certainty produce other benefits for employees and employers?
- What is the best methodology to determine and update salary level?
- Should the update derive from wage growth, cost of living increases, actual wages paid to employees, or some other measure?
- Should the Department more regularly update the standard level and the total annual compensation level for highly compensated employees? If so, how should these updates be made? House frequently should these updates occur? And what benefits, if any, could result from more frequent updates?
I would draw you attention to videos 6, 9, 11, 12, 18, 19, 20 and 21 below.
Video 15 below is Warwick City Councilor Stephen McAllister (Democrat) representing the United States Chamber of Commerce and is particularly odious.
Here’s the video:
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