Tag: overtime pay
Workers Left Behind In Trump’s ‘Booming’ Economy

Workers Left Behind In Trump’s ‘Booming’ Economy

Americans are not happy, and for good reason: They continue to suffer financial stress caused by decades of flat income. And every time they make the slightest peep of complaint about a system rigged against them, the rich and powerful tell them to shut up because it is all their fault.

One percenters instruct them to work harder, pull themselves up by their bootstraps and stop bellyaching. Just get a second college degree, a second skill, a second job. Just send the spouse to work, downsize, take a staycation instead of a real vacation. Or don’t take one at all, just work harder and longer and better.

The barrage of blaming has persuaded; workers believe they deserve censure. And that’s a big part of the reason they’re unhappy. If only, they think, they could work harder and longer and better, they would get ahead. They bear the shame. They don’t blame the system: the Supreme Court, the Congress, the president. And yet, it is the system, the American system, that has conspired to crush them.

Yeah, yeah, yeah, unemployment is low and the stock market is high. But skyrocketing stocks benefit only the top 10 percent of wealthy Americans who own 84 percent of stocks. And while more people are employed now than during the Great Recession, the vast majority of Americans haven’t had a real raise since 1979.

It’s bad out there for American workers. Last month, their ranking dropped for the third year running in the World Happiness Report, produced by the Sustainable Development Solutions Network, a UN initiative.

These sad statistics reinforce those in a report released two years ago by two university professors. Reviewing data from the General Social Survey, administered routinely nationally, the professors found Americans’ assessment of their own happiness and family finances has, unambiguously, declined in recent years.

That means stress. Forty percent of workers say they don’t have $400 for an unexpected expense. Twenty percent can’t pay all of their monthly bills. More than a quarter of adults skipped needed medical care last year because they couldn’t afford it. A quarter of adults have no retirement savings.

If only Americans would work harder. And longer. And better.

Despite right-wing attempts to pound that into Americans’ heads, it’s not the solution. Americans clearly are working harder and longer and better. The solution is to change the system, which is stacked against workers.

Workers are bearing on their backs tax breaks that benefited only the rich and corporations. They’re bearing overtime pay rules and minimum wage rates that haven’t been updated in more than a decade. They’re weighted down by U.S. Supreme Court decisions that hobbled unionization efforts and kneecapped workers’ rights to file class-action lawsuits. They’re struggling under U.S. Department of Labor rules defining them as independent contractors instead of staff members. They live in fear as corporations threaten to offshore their jobs—with the assistance of federal tax breaks.

Last year, the right-wing majority on the U.S. Supreme Court handed a win to corporatists trying to obliterate workers’ right to organize and collectively bargain for better wages and conditions. The court ruled that public sector workers who choose not to join unions don’t have to pay a small fee to cover the cost of services that federal law requires the unions provide to them. This bankrupts labor unions. And there’s no doubt that right-wingers are gunning for private sector unions next.

This kind of relentless attack on labor unions since 1945 has withered membership. As it shrank, wages for both union and nonunion workers did too.

Also last year, the Supreme Court ruled that corporations can deny workers access to class-action arbitration. This compels workers, whom corporations forced to sign agreements to arbitrate rather than litigate, into individual arbitration cases, for which each worker must hire his or her own lawyer. Then, just last week, the right-wing majority on the court further curtailed workers’ rights to class-action suits.

In a minority opinion, Justice Ruth Bader Ginsburg wrote that the court in recent years has routinely deployed the law to deny to employees and consumers “effective relief against powerful economic entities.”

No matter how hard Americans work, the right-wing majority on the Supreme Court has hobbled them in an already lopsided contest with gigantic corporations.

The administrative branch is no better. Just last week, the Trump Labor Department issued an advisory that workers for a gig-economy company are independent contractors, not employees. As a result, the workers, who clean homes after getting assignments on an app, will not qualify for federal minimum wage (low as it is) or overtime pay. Also, the corporation will not have to pay Social Security taxes for them. Though the decision was specific to one company, experts say it will affect the designation for other gig workers, such as drivers for Uber and Lyft.

Also, the Labor Department has proposed a stingy increase in the overtime pay threshold—that is, the salary amount under which corporations must pay workers time and a half for overtime. The current threshold of $23,660 has not been raised since 2004. The Obama administration had proposed doubling it to $47,476. But now, the Trump Labor Department has cut that back to $35,308. That means 8.2 million workers who would have benefited from the larger salary cap now will not be eligible for mandatory overtime pay.

It doesn’t matter how hard they work; they aren’t going to get the time-and-a-half pay they deserve.

Just like the administration and the Supreme Court, right-wingers in Congress grovel before corporations and the rich. Look at the tax break they gave one percenters in 2017. Corporations got the biggest cut in history, their rate sledgehammered down from 35 percent to 21 percent. The rich reap by far the largest benefit from those tax cuts through 2027, according to an analysis by the Tax Policy Center. And by then, 53 percent of Americans—that is, workers, not rich people—will pay more than they did in 2017because tax breaks for workers expire.

The White House Council of Economic Advisers predicted the corporate tax cut would put an extra $4,000 in every worker’s pocket. They swore that corporations would use some of their tax cut money to hand out raises and bonuses to workers. That never happened. Workers got a measly 6 percent of corporations’ tax savings. In the first quarter after the tax cut took effect, workers on average received a big fat extra $6.21 in their paychecks, for an annual total of a whopping $233. Corporations spent their tax breaks on stock buybacks, a record $1 trillion worth, raising stock prices, which put more money in the pockets of rich CEOs and shareholders.

That’s continuing this year. Workers are never going to see that $4,000.

No wonder they’re unhappy. The system is working against them.

This article was produced by the Independent Media Institute.

IMAGE: Workers on the assembly line replace the back covers of 32-inch television sets at Element Electronics in Winnsboro, South Carolina, REUTERS/Chris Keane/File Photo

Trump’s Labor Secretary Pick Admits To Employing Illegal Immigrant

Trump’s Labor Secretary Pick Admits To Employing Illegal Immigrant

WASHINGTON (Reuters) – U.S. President Donald Trump’s choice to lead the Labor Department has admitted to employing an undocumented immigrant as a house cleaner, according to multiple media reports on a revelation that has derailed previous Cabinet nominees.

Andrew Pudzer, chief executive officer of CKE Restaurants Inc, is one of several Trump nominees who faced strong opposition from Senate Democrats and progressive groups. He has criticized an overtime rule championed by the Obama administration and opposed raising the minimum wage to $15 an hour.

An aide for the Senate Committee on Health, Education, Labor, and Pensions said a week ago that the panel would not “officially” schedule a hearing until it receives Pudzer’s paperwork from the Office of Government Ethics.

Some political strategists said that could signal trouble for the fast-food executive.

Several media reports quoted a statement from Pudzer late on Monday as saying he took action as soon as he learned that his housekeeper, whom he and his wife had employed for a few years, was not legally permitted to work in the United States.

“We immediately ended her employment and offered her assistance in getting legal status,” he said in the statement, which was cited by the Huffington Post, the New York Times, and other media. He said he and his wife paid back taxes for employing the maid to the U.S. Internal Revenue Service and to the state of California.

Previous presidential appointees have run into problems over immigration issues.

Linda Chavez, nominated for labor secretary by President George W. Bush in 2001, allowed a Guatemalan woman who was in the United States illegally to live in her home and gave her spending money.

Zoe Baird, President Bill Clinton’s nominee for attorney general in 1993, withdrew from consideration after she admitted hiring two illegal immigrants as a driver and a nanny and not paying their Social Security taxes.

Another Bush nominee, former New York City police commissioner Bernard Kerik, withdrew his name from consideration for homeland security secretary in 2004 after he disclosed that questions had been raised about the legal status of a former housekeeper and nanny.

(Reporting by Doina Chiacu; Editing by Lisa Von Ahn)

IMAGE: U.S. President-elect Donald Trump gestures as Andy Puzder, CEO of CKE Restaurants, departs after their meeting at the main clubhouse at Trump National Golf Club in Bedminster, New Jersey, U.S., November 19, 2016. REUTERS/Mike Segar

How Trump Could Kill A Plan To Get You Overtime Pay

How Trump Could Kill A Plan To Get You Overtime Pay

Reprinted with permission from ProPublica.

Donald Trump ran for president as the billionaire who would champion working people.

As the president-elect put it in one of the major economic speeches of his campaign: “Too many of our leaders have forgotten that it’s their duty to protect the jobs, wages and well-being of American workers before any other consideration.”

One of the first tests of Trump’s pledge to help workers will come in how his administration handles the complicated rules that govern who has the right to time-and-a-half overtime pay.

Business groups and Republican state attorneys general sued to stop an Obama administration rule that would expand who gets overtime pay. A federal court temporarily blocked the rule in November. Now the Trump administration will decide whether to continue defending the rule in court.

At stake is the possibility of overtime pay for about 4 million workers around the country.

To get a sense of how big a deal that is: The still-sketchy deal to save factory jobs at a Carrier plant in Indiana — the subject of numerous Trump tweets and extensive media coverage — affected 1,000 or fewer workers.

Here’s how overtime works now

Most employees in the country have the legal right to time-and-a-half overtime pay if they work more than 40 hours in a week.

But there’s a major exception to that: white-collar workers. So who qualifies as a white-collar worker?

The government has a test for that. To be considered a white-collar worker who does not qualify for overtime pay:

  • You have to be paid a salary and not by the hour.
  • You have to make more than $455 per week — the equivalent of $23,660 per year.
  • And you have to work in certain types of jobs, including executive, administrative or professional positions. That has nothing to do with your title, but rather is defined by the nature of your job. For example, executive employees have to, among other things, supervise other workers.

Labor advocates say some employers have been playing games with who is considered a white-collar worker.

There have been a series of lawsuits and settlements outlining how, for example, the dollar store industry classifies employees as managers to avoid paying overtime. Some workers classified as managers spent much of their time doing the same manual labor as their subordinates.

Halliburton in 2015 agreed to pay $18 million in back wages for overtime to about 1,000 employees who worked as pipe recovery specialists and drilling advisers, among other jobs. The company acknowledged it had improperly classified those workers as exempt from the overtime rules. Walmart paid a $4.8 million settlement in 2012 for not paying security guards and other employees overtime they were due.

The Obama administration argues that the current overtime salary threshold, which was last raised in 2004 and has been eroded by inflation, is outdated.

According to the Department of Labor, in 1975, 62 percent of full-time salaried workers were eligible for overtime based on their pay. That compares to just 7 percent today.

The Obama rule would make another 4 million people eligible for overtime

The most important change made by the Obama administration was raising the salary threshold below which you generally have the right to overtime pay, regardless of your job duties.

The new level — which is currently on hold because of the pending lawsuit — is $913 per week, or $47,476 per year. That’s double the old standard of $23,660 per year.

The Department of Labor has calculated that the new rule could benefit 4.2 million workers around the country.

The affected workers would either start getting overtime for any time worked over 40 hours a week, or their salaries would have to be increased above the new threshold.

Business groups opposing the rule, most prominently the U.S. Chamber of Commerce, argued that “the salary threshold is going to result in significant new labor costs and cause many disruptions in how work gets done” including by reducing “workplace flexibility, remote electronic access to work, and opportunities for career advancement.”

Some employers, acting on the expectation that the rule would go into effect, have already raised salaries. The biggest name on the list is Walmart, which bumped starting pay for some managers from $45,000 to $48,500 in order to exempt them from overtime pay.

Politico reported that other employers that had promised pay increases, including several universities, have now cancelled the raises in light of the uncertainty around whether the rule will actually go in effect.

Trump’s pick for labor secretary has attacked the idea of expanding overtime, and the president-elect himself seems skeptical

When Trump was asked about the rule in August, he spoke of “a delay or a carve-out of sorts for our small business owners.” It’s not clear from his comments that Trump actually knew the details of the pending Obama changes.

The Trump transition team didn’t response to a request for comment. The Department of Justice also declined to comment about what could happen in the lawsuit after Jan. 20.

Andrew Puzder, Trump’s pick to be secretary of labor and the CEO of a fast-food company, has spoken out strongly against the overtime rule.

In a 2014 Wall Street Journalop-ed, Puzder warned against “rewarding time spent rather than time well spent.”

“What they lose in overtime pay they gain in the stature and sense of accomplishment that comes from being a salaried manager,” Puzder said of workers trying to climb the management ladder.

The fate of the rule depends on how things play out in a lawsuit that will drag on past the inauguration

In September, business groups including the U.S. Chamber of Commerce along with 21 states sued to block the new overtime rule.

In late November, a federal judge in Texas temporarily blocked the rule from going into effect, which was supposed to happen Dec. 1. The judge also signaled he is likely to eventually side with the business groups, though it’s not clear when that ruling will come.

As of right now, the case is proceeding on two fronts, in both the district court and appeals court. The only thing that’s known for sure is the litigation will continue past Jan. 20.

At that point, the Trump administration could decide to stop defending the rule or not to appeal any judgment against it.

Fearing that outcome, the AFL-CIO is trying to intervene in the case, hoping to continue defending the new rule if the Trump administration drops it. The district court hasn’t yet ruled on that motion.

IMAGE:Employees work at the checkout counters of a Walmart store in Secaucus, New Jersey, November 11, 2015. REUTERS/Lucas Jackson

Judge Blocks Obama Administration Rule Extending Overtime Pay

Judge Blocks Obama Administration Rule Extending Overtime Pay

(Reuters) – A federal judge on Tuesday blocked an Obama administration rule to extend mandatory overtime pay to more than 4 million salaried workers from taking effect, imperiling one of the outgoing president’s signature achievements for boosting wages.

U.S. District Judge Amos Mazzant, in Sherman, Texas, agreed with 21 states and a coalition of business groups, including the U.S. Chamber of Commerce, that the rule is unlawful and granted their motion for a nationwide injunction.

The rule, issued by the Labor Department, was to take effect Dec. 1 and would have doubled to $47,500 the maximum salary a worker can earn and still be eligible for mandatory overtime pay. The new threshold would have been the first significant change in four decades.

It was expected to touch nearly every sector of the U.S. economy and have the greatest impact on nonprofit groups, retail companies, hotels and restaurants, which have many management workers whose salaries are below the new threshold.

The states and business groups claimed in lawsuits filed in September, which were later consolidated, that the drastic increase in the salary threshold was arbitrary.

On Tuesday, Mazzant, who was appointed by President Barack Obama, ruled that the federal law governing overtime does not allow the Labor Department to decide which workers are eligible based on salary levels alone.

The Fair Labor Standards Act says that employees can be exempt from overtime if they perform executive, administrative or professional duties, but the rule “creates essentially a de facto salary-only test,” Mazzant wrote in the 20-page ruling.

The states and business groups that challenged the rule applauded the decision.

Nevada Attorney General Adam Paul Laxalt said in a statement that the ruling “reinforces the importance of the rule of law and constitutional government.”

The Labor Department said it strongly disagrees with the decision. It remains confident that the entire rule is legal, and it is currently considering its options, department spokesman Jason Surbey said.

The Labor Department can appeal to the New Orleans, Louisiana-based 5th U.S. Circuit Court of Appeals, but that court has stymied the Obama administration before, blocking Obama’s executive actions on immigration in 2015.

In any case, the Labor Department could drop the appeal after Republican President-elect Donald Trump takes office in January.

In August, Trump told the website Circa that the overtime rule was an example of the type of burdensome business regulations he would seek to roll back as president, perhaps by exempting small businesses or delaying implementation.

Even if the rule survived the legal challenge, it could be upended by legislation passed by Congress or withdrawn by Trump’s Department of Labor.

U.S. Chamber of Commerce official Randy Johnson said in a statement that the rule would have been costly and disruptive to businesses.

But Ross Eisenbrey of the left-leaning Economic Policy Institute, which supported the rule, called the decision “extreme and unsupportable.”

“It is also a disappointment to millions of workers who are forced to work long hours with no extra compensation, and is a blow to those Americans who care deeply about raising wages and lessening inequality,” Eisenbrey said in a statement.

The case is Nevada v. U.S. Department of Labor, U.S. District Court for the Eastern District of Texas, No. 16-cv-731.

(Reporting by Daniel Wiessner and Robert Iafolla; Editing by Alexia Garamfalvi and Leslie Adler)

IMAGE: With the Washington Monument looming in the background, a crew works on the roof of the newly constructed United States Institute of Peace in Washington January 21, 2010.   REUTERS/Kevin Lamarque