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Overtime Pay Rule Needs ‘Bold’ Action, says Trumka

President Barack Obama needs to “go bold” with the upcoming revision of overtime pay rules expected shortly from the U.S. Department of Labor, says AFL-CIO President Richard Trumka. In the video above, he says:

Raising wages is the issue of our time. And President Obama has a tremendous chance to raise the wages of millions of Americans out there. We’re urging him to go bold and to not dilute the overtime regulation that’s about to come out.

In March, Obama directed the Labor Department to update overtime eligibility rules to restore the overtime protection workers have lost to inflation since 1975. 

Under federal overtime regulations, workers who earn less than a certain salary level are generally entitled to overtime protection. For decades after enactment of the federal overtime law in 1938, this salary threshold was updated every few years as a routine matter. However, the last regular adjustment to the salary level was made by President Gerald R. Ford in 1975, and workers’ overtime protections have been steadily eroded by inflation.

The current federal threshold is $455 per week—or $23,660 per year—and to simply make up for inflation, Trumka said it should be raised to $51,168. He told the Washington Post’s Greg Sargent:

The spotlight is now on raising wages. Raising wages is the key unifying progressive value that ties all the pieces of economic and social justice together. We think the president has a great opportunity to show that he is behind that agenda by increasing the overtime regulations to a minimum threshold of $51,168. That’s the marker.

As Trumka said the $51,168 is the least the administration should do. Some members of Congress have called for a $54,000 threshold, and in a recent Politico column Seattle entrepreneur and billionaire Nick Hanauer wrote the threshold should be set at $69,000.

Business groups are adamantly opposed to raising workers’ wages with a new overtime pay rule and have lobbied the White House against raising the threshold. There has been speculation the Obama administration may settle on a lower adjustment that falls far short of what’s needed to make up for 30 years of inflation.

Trumka told Sargent that business groups will oppose the move no matter where Obama sets the threshold.

Why would you settle for a figure that excludes millions of people when they’re not going to support that, either? The president should go full throttle on restoring the 40-hour workweek and not dilute this opportunity for raising wages.

More than 6.1 million workers would become eligible for overtime pay if the threshold was raised to $51,168. But 2.6 million would still be left out of overtime protection if the figure was set at the $42,000, which some suspect the Labor Department is eyeing. Click here for an Economic Policy Institute (EPI) chart showing how many workers would get a raise under various proposed thresholds.

When the proposed revision was announced, EPI Vice President Ross Eisenbrey said many of the workers who would benefit from restored overtime protection are insurance clerks, secretaries, low-level managers, social workers, bookkeepers, dispatchers, sales and marketing assistants and employees in scores of other occupations.

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