Economists say new overtime is "victory for leaders"

The new Trump government overtime rules will come into force on January 1, 2020. Some economists and labor activists have said that they do not go far enough to support the workers.

"This is a real victory for business leaders and a real loss for the workers," ABC News Heidi Shierholz, former chief economist of the US Department of Labor, told ABC News on Wednesday. "Millions of less workers will benefit from overtime protections on which the middle class depends."

"It's a waste for these workers and for the economy as a whole," added Shierholz, who worked at the Department of Labor from 2014 to 2017 and is currently senior economist at the Institute of Labor. economic policy.

Workers unveiled Tuesday their new overtime rule, promising to "make 1.3 million eligible American workers pay for overtime". It's the first update of these rules in 15 years, according to a government statement.

The update also raised the annual salary threshold at which the one-and-a-half-hour salary came into effect after 40 hours, from $ 23,660 to $ 35,568.

Richard B. Levine / Newscom, FILE

Acting Secretary of Labor Patrick Pizzella said in a statement that the rule "brings a common-sense approach that offers consistency and certainty to employers, as well as clarity and prosperity for American workers."

The rules could benefit workers currently paid slightly above the threshold of $ 23,660, which exempts them from overtime pay.

Critics, however, quickly pointed out that the Trump government's overtime rules did not go as far as the 2016 Obama administration's proposed by-law, which was subsequently abolished by a district court. after companies and states fought it.

According to Shierholz, about 8 million fewer workers will benefit from new or enhanced overtime protections under this Trump rule compared to the 2016 rule, compared to the 2016 rule. "Overtime protection is an essential element of the labor protections that support a middle class.It is a win for people who have benefited from a rigged economy. "

Kelly Ross, deputy director of policy at the American Federation of Labor and the Congress of Industrial Organizations, said that one of the main problems with this new overtime rule was that, in general, a lot of of time between updates.

"They do not really follow the protections for overtime that has been lost due to inflation, if it's nothing else, or changing salary levels," he said. he declared.

The previous update on overtime protection in 2004 was the first since 1975, Ross said.

"A very important thing that is missing from this rule is an automatic adjustment – we have seen twice that a long time has passed between the adjustments," he added. "The situation is similar to that of the minimum wage: you increase the minimum wage once, a long period of time runs out and the value of the minimum wage erodes over time. overtime protection. "

Nam Y. Huh / AP, FILE

Ross also argued that the salary threshold "should be much higher," tied to wages and adjusted for inflation.

"Too many people are denied overtime," said Ross, explaining how some employers qualify employees as managers to prevent them from receiving overtime.

"You have to make sure that these people are leaders or leaders in good faith," he said. "You can not have people who spend most of their time doing non-manager work with a manager title and calling management."

"These rules do not protect against this type of abuse."