Blue States Push Ahead with New Overtime Rules

Blue States Push Ahead with New Overtime Rules

The controversial new overtime rule the US Labor Department issued last year during the Obama administration is currently tied up in court, and after the Republican victory in November’s elections, it is looking unlikely to survive in its current form. The rule, which would have immediately raised the salary threshold at which employees are exempt from overtime pay from $23,660 to $47,476 as of December 1 of last year, was blocked just before going into effect, so many employers had already made or executed plans to comply with it by increasing pay or reducing hours for some employees. Some of these plans will remain in place, partly because employers don’t want to renege on raises and partly because they expect the threshold to increase in the near future regardless, even with Republicans in control of Congress and the White House.

The alternative rules proposed by GOP lawmakers would raise the federal threshold less dramatically, phasing it in over a period of several years. At the state level, however, Democrats are looking to push ahead with new regulations similar or identical to the Obama administration’s rule in the statehouses they control. New York State enacted its own version of the overtime rule at the start of the new year, though it may also be challenged in court. Now, according to the Maryland Reporter, Democratic lawmakers in Annapolis are looking to do the same:

The bill, HB665, would increase the salary cap for white-collar and service workers currently exempt from overtime pay to $47,476 up from the current $23,660. That would be $913 per week, up from $455 weekly. “This salary level has not been changed since 2004 and is now less than the poverty level for a family of four,” said Del. Jimmy Tarlau, D-Prince George’s, in testimony before the House Economic Matters Committee on Tuesday. …

By classifying ordinary workers as “supervisors,” companies have exempted many of their workers from receiving overtime pay, Tarlau told the committee on Tuesday.

“This means that a supervisor at a McDonald’s who makes $455 a week might be working 76 hours a week without extra compensation and might actually only be making $7/hour or less than the minimum wage,” Tarlau said. “We ought to close this loophole and restore this law’s coverage and the right to overtime pay to what they were back when America was a great place for working Americans.”

Like rising state minimum wages, these efforts to raise the overtime salary threshold are further evidence that some states intend to counter deregulation at the federal level with progressive legislation at the state and local level during the Trump administration. Last month, Bloomberg’s Josh Eidelson looked into this trend, noting that Democrats in Connecticut, Michigan, Rhode Island, and Wisconsin were looking to introduce similar bills:

More are likely to follow, said Sam Munger, a senior adviser for the State Innovation Exchange, which promotes progressive legislation. …

With Republicans in control of Congress, even under Obama labor advocates had turned much of their focus to state and city governments as the arena to pass workplace policies like sick-pay mandates and minimum wage hikes. With a Republican in the White House, that will be even more the case, said Wilma Liebman, who headed the National Labor Relations Board during Obama’s first term. “That’s where the action’s going to be for the next few years in terms of trying to increase protection,” she said.