In recent decades, the marking of Labor Day has become increasingly irrelevant as national union membership has hit surprisingly low levels and some of the most basic attempts to protect workers’ paychecks are cast aside by government.
This year, the annual celebration of laborers was watered down by a new trend that is known as “wage theft” by U.S. companies. Wage theft refers to a failure to pay overtime for work beyond 40 hours a week, but it also involves off-the-clock work, job title misclassifications that unfairly exempt workers from overtime pay, sub-minimum wage pay, denial of lunch breaks, and employer confiscation of tips earned by waitresses and waiters.
A recent study shows that these violations are not just the domain of so-called “sweat shops” or fast-food restaurants or sleazy small businesses. A report, based on federal statistics, released by the liberal group Good Jobs First revealed that top U.S. corporations — from Walmart to Bank of America to AT&T — were nabbed by the feds for “forcing employees to work off the clock or depriving them of required overtime pay,” based on a review of labor lawsuits and federal enforcement actions.
This should not be a liberal or a conservative issue, not when it involves large corporations cheating the system to squeeze out more profits at the expense of workers living paycheck to paycheck. Anyone from a blue-collar or working-class background can plainly see the unfairness of what is taking place.
Hundreds of billions in corporate penalties
Throughout the Bush and Obama administrations, hundreds of firms collectively paid billions of dollars in wage theft penalties since 2000.
Yet, beyond the basic federal enforcement of labor rules, the Trump administration’s decision to toss away an attempt to update employer requirements for overtime pay is particularly disturbing.
The standard that salaried workers should be paid time-and-half for work above 40 hours per week was established several decades ago. But inflation chopped away at an eligibility standard last created during the Ford administration in 1975. The most recent threshold was slightly raised in 2004, when President George W. Bush set the salary amount at a maximum of $23,660 for those worthy of overtime pay.
In 2016, the Obama administration announced a new regulation bringing the OT rules up to par. Factoring in the rate of inflation, the new requirement would nearly catch up to the level of decades ago, mandating that salaried workers earning up to $47,476 — double the current rate — must be paid time-and-a-half beyond 40 hours of work. The upgraded OT rule would not apply to white-collar categories such as executives and administrators.
Yet, President Trump gleefully struck down the impending rule in 2017, asserting that it was an anti-business burden. He never explained how the change might be anti-worker. The new rule would have boosted paychecks for as many as 275,000 Michigan workers.
Before that, the updated standard for OT pay was blocked by a lawsuit filed by a group of Republican state attorneys general, including Michigan Attorney General Bill Schuette. When a federal court issued an injunction in the AGs’ favor in 2016, the Trump administration eventually, and happily, declined to appeal, in effect killing Obama’s drawn-out effort to update OT standards.
Since then, salaried workers have come up short by more than $700 million for extra hours worked, and that number may grow to $1.2 billion by the end of this year.
Schuette at odds with overwhelming support
With Schuette now running as the Republican nominee for Michigan governor in November, it might be worth remembering a statewide poll taken in May of this year that found overwhelming support for updating the OT rule to account for inflation.
By an overwhelming margin of 75-18 percent, Michigan voters, including a GOP majority, supported expanding overtime pay eligibility among salaried workers.
Beyond the OT issue, another worker-related factor that played out over the past 18 months was a version of amnesty for companies that rely upon the federal government for a significant portion of their income.
Last year, pro-Trump congressional Republicans voted to reverse a rule that prevented companies which routinely violate their workers’ paycheck rights from receiving federal contracts without impunity.
In March 2017, a bill passed by Congress and signed by President Trump ended a regulation imposed during the Obama administration that “blacklisted” federal contractors who engage in wage theft.
Guilty companies had been blocked from competing for large federal contracts, those over $500,000, until they cleared up the wage theft complaints filed against them. A report presented to the GOP Senate at the time showed that 66 of the federal government’s 100 largest contractors had at some point violated federal wage and hour laws.
In the end, the Republicans deleted a rule that discouraged the General Services Administration (GSA) from awarding federal contracts to companies with a history of stealing their employees’ wages, violating workplace safety standards, or discriminating in hiring or pay. To be fair, the order also required contractors in the future to provide their employees with “the necessary information each pay period to make sure they are getting paid what they are owed.”
To be clear, the current debate over fair treatment of workers doesn’t take into account the harsh, hyper-efficiency plans put into place the during the Great Recession, when employers shed jobs and many remaining workers were forced to essentially do two jobs for the same (or less) pay. According to Gallup polling, full-time salaried workers now work an average of 49 hours weekly, with little or no overtime pay to show for it. I would suggest the 49-hours-average downplays an increase for many workers to the level of 60 or more hours a week, without any wage compensation.
Over the Labor Day weekend, a commentary published by the unlikely duo of billionaire businessman Nick Hanauer and liberal Democratic state Sen. Jim Ananich of Flint offered this:
It used to be that if you worked more than 40 hours a week, your employer would pay time-and-a-half in exchange for your work. That was the deal back when 62 percent of full-time salaried workers were eligible for overtime. But over the past four decades, the number of workers who qualify for overtime has eroded because the salary threshold hasn’t kept pace with inflation. In 1975, a worker earning the (inflation-adjusted) equivalent of up to $61,200 a year qualified for overtime, while that threshold is capped at $23,660 today. According to the Department of Labor, a pitiful 7 percent of salaried workers now qualify for overtime pay.
The Hanauer/Ananich team provided this conclusion:
Time is money, and ordinary folks are getting less of both.