Chairman Scott: New Overtime Rule Leaves Millions of Middle-Class Workers Behind
WASHINGTON – Chairman Bobby Scott (VA-03) issued the following statement after the Department of Labor published a final rule to raise the overtime salary threshold to $35,568 from $23,660. Under the Fair Labor Standard Act (FLSA), hourly workers and salaried workers who earn below a salary threshold set by the Department of Labor are automatically eligible for overtime pay of one-and-a-half times their regular rate of pay for any hours worked over 40 in a workweek.
“American workers have not seen a meaningful update to the overtime rule for nearly four decades. As a result, millions of salaried workers are putting in 50- and 60-hour weeks while still being paid for just 40 hours of work.
“The Department of Labor’s new overtime salary threshold is a step in the right direction, but it fails to cover millions of middle-class workers who would have been eligible to receive overtime pay under the Obama administration’s 2016 rule. Under that 2016 rule, the overtime salary threshold would have been about $51,000 in 2020. Rather than defending the Obama-era rule against a frivolous legal challenge, the Trump administration has written a new rule that assumes people making $35,000 a year are highly paid executives who do not need overtime protections.
“At its peak in the 1975, more than 60 percent of full-time salaried workers were automatically eligible for overtime based on their salary level. By 2016, the overtime rule covered less than seven percent of full-time salaried workers. The Obama administration’s rule, which was a modest but significant effort to restore overtime protections, would have covered a third of salaried workers. The Trump overtime rule will cover less than 15 percent of these workers.
“In addition, the administration’s new rule does not include automatic updates to the overtime threshold in the future to keep pace with changes in the economy. This all but assures that the new threshold, which is already inadequate, will gradually exclude more and more workers from overtime protections in the years to come.
“After a decade-long economic expansion, workers’ wages are still lagging behind increases in productivity, corporate earnings, and even the costs of basic essentials. Americans deserve to be paid for every hour they work, and those who work more than 40 hours of week should be paid time-and-a-half for hours over 40. This overtime rule is a missed opportunity to address the fundamental challenge in our economy – workers are not getting their fair share of the profits they produce.”
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