Today, EPI Senior Economist and Director of Policy Heidi Shierholz testified before the U.S. House of Representatives, Committee on Education and Labor, Subcommittee on Workforce Protections, regarding the Department of Labor’s March 2019 proposal to update the overtime salary threshold. Shierholz opposes the DOL’s 2019 proposal, which set the threshold under which salaried workers are guaranteed overtime to $35,308 for a full-year worker. In her testimony, Shierholz makes the case that DOL uses an inappropriate methodology to set the salary threshold in its proposal, while the 2016 rule it would supplant used a more appropriate—albeit conservative—methodology.
In her testimony, Shierholz urges Congress to step in and pass the Restoring Overtime Pay Act, which codifies the 2016 rule, setting the threshold at an appropriate level and automatically updating it going forward.
“The Trump administration is applauding itself for proposing an overtime rule that would raise the overtime threshold for American workers,” said Shierholz. “In reality, they are leaving behind millions of working people who would have benefited from the 2016 rule. If the DOL won’t act to help these workers, Congress should intervene to set the threshold to the higher level.”
Shierholz explains that the 2019 rule is based on the notion that someone being paid $35,308 a year in 2020 is a well-paid executive who doesn’t need or deserve overtime protections. The threshold is based on the 20th percentile of the earnings of full-time salaried workers in the lowest-wage census region, currently the South. The Restoring Overtime Pay Act would increase the threshold to the 40th percentile in the same region, which would be $51,064 in 2020, and automatically updates the level going forward.
Shierholz’s analysis shows that 8.2 million workers who would have benefitted from the 2016 final rule will be left behind by the Trump proposal—far more than estimated by DOL. This includes 4.2 million women, 3.0 million people of color, 4.7 million workers without a college degree, and 2.7 million parents of children under the age of 18. The 8.2 million workers left behind by this proposal are comprised of 3.1 million workers who would have gotten new overtime protections under the 2016 rule, and another 5.1 million workers who would have gotten strengthened overtime protections under that rule.