HARRISBURG, Pa. – Analysts say the U.S. Labor Department’s new overtime rule for salaried employees shortchanges thousands of Pennsylvania workers.
In 2016 the Obama administration proposed raising the maximum amount salaried employees can earn and still be entitled to receive overtime pay to more than $47,000 a year.
But the new rule announced on Tuesday raises the threshold to less than $36,000 a year.
According to Stephen Herzenberg, executive director of the Keystone Research Center, that means many workers will continue to be denied pay for the extra hours they put in.
“Bottom line is, 310,000 workers in Pennsylvania that the Obama administration was proposing to make automatically eligible for overtime will miss out because the new rule doesn’t help them,” he points out.
The Labor Department says the higher threshold is the first increase since 2004 and will make more than 1 million workers nationwide eligible for overtime.
For decades, more than 60% of salaried workers were entitled to overtime. This is only the second time the threshold has been raised since 1975 and Herzenberg contends it was an opportunity to make up for years of eroded earnings.
“The Trump administration chose instead to side with corporations that take advantage of salaried workers and make them work 45, 50, 55 hours a week for salaries that can end up amounting to $12 or even $10 an hour,” he states.
Herzenberg adds that with the new rule U.S. workers will lose $1.4 billion in wages in 2020 alone compared with their earnings under the Obama proposal.
When the Obama proposal was derailed by the courts, Gov. Tom Wolf proposed raising the threshold in Pennsylvania in stages to $48,000 a year.
Herzenberg says that proposal is now making its way through the regulatory process.
“We’re hopeful that by as early as the beginning of next year, Pennsylvania salaried workers all the way up to $48,000 would be on a track to getting overtime pay automatically,” he states.
Herzenberg notes the governor’s proposal has provisions to let the overtime threshold keep pace with changes in the cost of living.