NELP Applauds Pennsylvania Gov. Wolf for Expanding Overtime Pay

Following is a statement of Christine Owens, Executive Director, National Employment Law Project:

“By expanding overtime pay for thousands of Pennsylvanians, Governor Wolf has set an example for other state leaders to follow. In the coming months, we expect governors and legislators around the country to stand up and resist the Trump Administration’s rollback of overtime protections to ensure middle-class Americans get this long-overdue raise.”

Background

Since the 1970s, the salary threshold for being an overtime-exempt “white collar” worker has steadily eroded. As a result, low-level salaried employees like assistant managers at McDonald’s or Walmart are today denied overtime protections and can be forced to work 50 or 60 hours a week with no extra pay as long as their salary is at least a $23,660 a year – a paltry level that translates to about $11 an hour at 40 hours per week, and a lot less at 50 or 60.

In 2016, the U.S. Department of Labor under President Obama tackled this problem by raising the salary level to $47,476 – a conservative benchmark that was set based on 40 percent of the median wage in the lowest-paying parts of the country. This pay raise for the middle class extended overtime protections to 4.2 million workers, clarified coverage for 8.3 million more, and brought back the portion of the salaried workforce covered by overtime to 23 percent – a level still lower than it used to be but a big improvement from today.

But last fall, the Trump Labor Department announced it is preparing to roll back the Obama overtime expansion. Trump Labor Secretary Alex Acosta has indicated he plans to revise and lower the salary level substantially.

Fortunately, states are fighting back. As they are doing on immigration, climate change, and so many other fronts, governors and state legislatures can take matters into their own hands by locking in the Obama pay protections at the state level, since most states already have their own overtime laws. By updating them to adopt the Obama overtime salary standard – or for states in higher wages regions, even higher standards – local leaders can effectively block the rollback in their states.

With Governor Wolf’s announcement, Pennsylvania joins New York and California in expanding overtime pay and protecting workers in their states from the rollback. In fact, New York and California are raising their overtime standards even higher than the Obama $47,476 level.

Employer surveys show that 50 percent or more of national companies have already implemented the higher overtime standards and adjusted their pay scales, including dozens of major retailers, restaurant chains and banks. That shows that keeping the Obama overtime expansion is economically realistic and would not entail a burdensome transition for businesses.

Worker advocates are urging leaders in more states to follow Pennsylvania’s lead and protect overtime at the state level.

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