Tag Archives: overtime

US court blocks overtime expansion pay rule for 4 million

A federal court this week blocked the start of a rule that would have made an estimated 4 million more American workers eligible for overtime pay heading into the holiday season, dealing a major blow to the Obama administration’s effort to beef up labor laws it said weren’t keeping pace with the times.

The U.S. District Court in the Eastern District of Texas granted the nationwide preliminary injunction, saying the Department of Labor’s rule exceeds the authority the agency was delegated by Congress. Overtime changes set to take effect Dec. 1 are now unlikely be in play before vast power shifts to a Donald Trump administration, which has spoken out against Obama-backed government regulation and generally aligns with the business groups that stridently opposed the overtime rule.

“Businesses and state and local governments across the country can breathe a sigh of relief now that this rule has been halted,” said Nevada Attorney General Adam Laxalt, who led the coalition of 21 states and governors fighting the rule and has been a frequent critic of what he characterized as Obama administration overreach. “Today’s preliminary injunction reinforces the importance of the rule of law and constitutional government.”

The regulation sought to shrink the so-called “white collar exemption” that allows employers to skip overtime pay for salaried administrative or professional workers who make more than about $23,660 per year. Critics say it’s wrong that some retail and restaurant chains pay low-level managers as little as $25,000 a year and no overtime — even if they work 60 hours a week.

Under the rule, those workers would have been eligible for overtime pay as long as they made less than about $47,500 a year, and the threshold would readjust every three years to reflect changes in average wages.

The Department of Labor said the changes would restore teeth to the Fair Labor Standards Act, which it called “the crown jewel of worker protections in the United States.” Inflation weakened the act: overtime protections applied to 62 percent of U.S. full-time salaried workers in 1975 but just 7 percent today.

The agency said it’s now considering all its legal options.

“We strongly disagree with the decision by the court, which has the effect of delaying a fair day’s pay for a long day’s work for millions of hardworking Americans,” the labor department said in a statement. “The department’s overtime rule is the result of a comprehensive, inclusive rulemaking process, and we remain confident in the legality of all aspects of the rule.”

Opponents fought hard against the rule, saying it would increase compliance costs for employers who would have to track hours more meticulously and would force companies to cut employees’ base pay to compensate for overtime costs that kick in more frequently.

“This overtime rule is totally disconnected from reality,” said Karen Kerrigan, president and CEO of the Small Business and Entrepreneurship Council. “The one-size-fits-all doubling of the salary threshold demonstrated ignorance regarding the vast differences in the cost-of-living across America.”

The court agreed with plaintiffs that the rule could cause irreparable harm if it wasn’t stopped before it was scheduled to take effect next week.

The Department of Labor could appeal the ruling, which might end up at a Supreme Court that includes some Trump appointees.

But the injunction takes political pressure off the incoming administration at an opportune time, according to labor law professor Ruben Garcia of UNLV’s Boyd School of Law. With no new overtime changes kicking in Dec. 1, Trump can accept the status quo and won’t have to risk angering workers by walking back overtime benefits shortly after employees start receiving them.

His administration could choose to make its own rule changes through the lengthy administrative process. Or Congress could amend labor laws.

The impending rule wasn’t front and center in the presidential campaign, but Trump did tell the news site Circa in August that he would love to see a delay or carve-out for small businesses in the overtime regulation. Republican House Speaker Paul Ryan was more vocal against it, saying it would be an “absolute disaster” for the economy and was being rushed through by Obama to boost his political legacy.

 

Wisconsin taxpayers ordered to pay overtime costs for Scott Walker’s 24/7 security on campaign trail after he fails to report their hours

Federal authorities are ordering retroactive overtime for Wisconsin State Patrol officers who serve as bodyguards for Gov. Scott Walker and other state officials, a television station reported.

The U.S. Department of Labor is requiring the Wisconsin Department of Transportation to award overtime pay dating to May 19, 2013, to nine State Patrol officers, WKOW-TV (http://bit.ly/1N1j1MN ) reported Friday. Those officers make up Wisconsin’s Dignitary Protection Unit, which provides security for Walker 24 hours a day, seven days a week. That includes the Republican’s protection on the presidential campaign trail. Since the State Patrol is a division of the state Transportation Department, the officers are paid out of that agency’s budget.

WISDOT spokeswoman Peg Schmitt told WKOW the agency was notified of the decision Monday but said that officials have not yet determined how much it will cost state taxpayers.

Rhonda Burke, a Labor Department spokeswoman in Chicago, told the station she did not yet know if the decision was handed out in response to a complaint. If a complaint was filed alleging overtime was not being correctly paid, federal wage and hour investigators would ask to examine payroll records, including hours worked and rates of pay, to ensure the state was paying overtime in accordance with the law, she said.

Burke did not immediately reply to Associated Press email requests for comment. A spokeswoman for Walker referred comment to Schmitt, who did not immediately respond to an email request Saturday.

The cost for Walker’s security detail jumped from $1.6 million in 2011 to $2.4 million in 2014, WKOW reported. The out-of-state portion of that 2014 tab was $89,454, a number which is expected to rise in 2015 with his run for the GOP presidential nomination.

State Rep. Katrina Shankland, D-Stevens Point, and state Sen. Dave Hansen, D-Green Bay, announced a new legislative proposal last week that would require any state elected official who is running for — or even considering running for — higher office to submit a monthly travel form with the Government Accountability Board that explains what costs were incurred and who paid for them. Any campaign costs incurred by taxpayers would have to be reimbursed in a timely manner.

Both Shankland and Hansen cite the Labor Department’s overtime decision as an example of a lack of transparency associated with Walker’s security expenses.

“Instead of waiting for the federal government to step in, the state should have paid these officers the overtime pay they were owed to begin with,” Shankland said.

Changes to overtime rules could make millions eligible for time-and-a-half

President Barack Obama is seeking changes in overtime rules that will make millions of workers eligible for time-and-a-half pay for their extra work.

Obama was expected to sign a presidential memorandum today (March 13) directing the Labor Department to propose rules that expand the number of employees who benefit from overtime pay.

The rules would be aimed at salaried workers who make more than $455 a week and those who are ineligible for overtime because they are designated as management even though their supervisory duties are minimal.

The rules do not require congressional action but could take more than a year to implement.

Obama has put a focus this year on increasing worker pay, including a call for Congress to increase the federal minimum wage from $7.25 an hour to $10.10. He also issued an executive order requiring federal contractors to abide by the higher minimum wage.

In his memorandum, Obama plans to direct the Labor Department to recommend new regulations that could increase the salary threshold for overtime eligibility and to change the definition of what constitutes a supervisor.

Obama’s attention to overtime dovetails with his emphasis on correcting wage disparities, a theme that he has said will be central to the remainder of his presidential term. It also serves his political ends during a midterm election year, giving him a populist issue along with his calls for a higher minimum wage and better pay for women.

The salary-per-week limit separating those who get overtime and those who don’t was increased to $455 in 2004 during the Bush administration. At the time, it hadn’t been increased since the mid-1970s.

“What we know right now is the threshold has been eroded by inflation, and there 3.1 million people who, if the threshold had kept up just with inflation, would automatically be covered by overtime provisions,” said Betsey Stevenson, a member of Obama’s Council of Economic Advisers.

Business groups said any forced increase in wages has consequences that could affect employment, prices and the survival of certain companies which, they said, already have to comply with requirements of a new health care law.

“Similar to minimum wage, these changes in overtime rules will fall most harshly on small- and medium-sized businesses, who are already trying to figure out the impact of Obamacare on them,” said Marc Freedman, executive director of Labor Law Policy for the U.S. Chamber of Commerce.