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What’s at Stake for Georgia Workers in the U.S. Senate Runoffs

by | Dec 9, 2020 | Uncategorized

The runoff elections for U.S. Senate in Georgia on January 5, 2021 will determine control of the Senate and affect national policy across a wide range of areas. This fact sheet provides an overview of the likely impact of the Senate races on two key worker issues: access to unemployment benefits during the pandemic-induced recession, and raising the federal minimum wage from its current level of $7.25 per hour. The fact sheet presents data from the Century Foundation and the Economic Policy Institute on the impact on Georgia workers of senators’ policy positions on these issues.

If Senator David Perdue and Senator Kelly Loeffler are elected in January, pandemic unemployment insurance benefits are likely to be restored only to a very limited degree, if it all—and the federal minimum wage is likely to remain frozen at $7.25 per hour, as it has been since 2009. But if Raphael Warnock and Jon Ossoff are elected to the Senate, jobless Georgians are likely to see unemployment benefits restored and extended for more of the pandemic-induced recession. And Georgia workers will be far more likely to see the federal minimum wage increased and gradually phased up to $15 an hour—the first increase in 11 years. The public should find out more about these and other issues critical to Georgians and ask the candidates to discuss their positions to better understand where they stand.

 

Unemployment Insurance

Figure 1
Source: Century Foundation analysis
  • As the pandemic swept the nation in the spring, Congress approved expanded unemployment insurance (UI) benefits in the CARES Act—including an extra $600 per week to ensure that unemployed Georgians could actually pay their bills, since state UI benefits in Georgia and most of the country are very low.
  • When the $600 per week UI supplement expired in July, Senator Kelly Loeffler and Senator David Perdue sided with Senate Majority Leader Mitch McConnell in refusing to extend it, causing UI benefits in Georgia to plummet to just $254 a week for the average unemployed worker—not nearly enough to allow those out of work to pay their bills and put food on the table.
  • Now, even those lower benefits are scheduled to end for many unemployed workers the day after Christmas. The Century Foundation projects that more than 330,000 Georgians will be cut off from this safety net and fall off a financial cliff, unless Congress acts to extend unemployment assistance. That figure includes nearly 147,000 Georgians receiving Pandemic Unemployment Assistance (PUA), which provides assistance to workers who are otherwise shut out of state unemployment benefits, such as gig workers, self-employed persons, church workers, and many part-time workers. It also includes more than 183,000 Georgians receiving Pandemic Extended Unemployment Compensation (PEUC), which provides 13 weeks of extended unemployment benefits for workers whose weeks of other jobless aid has run out. See Figure 2.
  • These are conservative projections and could end up being significantly worse for two reasons. First, Georgia’s PUA enrollment alone has remained nearly unchanged for the last three months, with net enrollment hovering at over 200,000. This indicates that employment prospects for gig workers, self-employed persons, church workers, and part-time workers—who are often underemployed—have not improved much at all recently. These working Georgians face a December 26 cutoff from possibly the only income they have left. Second, Georgia’s Department of Labor has yet to release all of its data on PEUC enrollment. Therefore, enrollment may be larger than projected.
Figure 2
Georgia Workers Facing Loss of CARES Act Unemployment Benefits on Dec. 26
Workers on PEUC 183,648
Workers on PUA 146,674
Total 330,322
Source: Century Foundation analysis
  • By putting money in the pockets of 330,000 jobless Georgians to spend on necessities at local businesses, extending unemployment benefits would also stimulate Georgia’s economy and thereby preserve and create jobs in the state, offsetting some of the past year’s losses. The Economic Policy Institute estimates that extending the PUA and PUEC programs until the end of 2021 and restoring the $600 weekly supplement would boost the national economy by 3.5% and create or save 5.1 million jobs across the country—including 144,000 in Georgia.
  • In the past, Mitch McConnell, with the support of Senator Kelly Loeffler and Senator David Perdue, has called for restoring a lower $200 per week unemployment supplement, although they have refused to bring such a package to a vote or pass it.
  • But now with 330,000 Georgians just weeks away from losing their CARES Act unemployment benefits, McConnell’s latest proposal includes no unemployment supplement at all, and would extend benefits for the 330,000 Georgians for just one month through the end of January with an explicit phase out—despite the fact that we have months and months of pandemic and recession still ahead of us.
  • Senators Perdue and Loeffler have been silent about the 330,000 Georgians now facing loss of their CARES Act unemployment benefits on December 26.
  • It is true that some of the unemployed Georgians losing their PEUC CARES Act benefits will be eligible for continued unemployment benefits under Georgia’s State Extended Benefits (EB) program. But EB is a poor substitute for PEUC because of its very restrictive eligibility rules. Only 600,000 jobless workers are on the program nationwide, and it has a number of roadblocks including a rule that excludes unemployed workers who were eligible for regular UI and PEUC, but who worked fewer than 20 weeks before losing their job.
  • Moreover, Georgia must pay the cost of EB benefits for as many as 13 weeks— not the federal government. Senators Perdue and Loeffler appear ready to saddle the state with the heavy cost of paying for those benefits.
  • Senate candidates Reverend Raphael Warnock and Jon Ossoff have both called for extending unemployment benefits and restoring the $600 per week supplement. A Democratic majority in the Senate would be expected to act quickly to approve further pandemic relief, including restoring and extending unemployment benefits.
  • Perdue and Loeffler’s opposition to restoring the $600 per week unemployment supplement and silence about the 330,000 Georgians about to lose CARES Act unemployment benefits come as the pandemic-induced unemployment crisis is hitting Black Georgians much harder than whites. During the pandemic, Black workers have been significantly overrepresented among Georgians losing their jobs and filing for unemployment. In the latest data from October, Black workers made up 63% of workers newly losing their jobs, while they represent just 31% of Georgia’s workforce. And the number of Black workers filing unemployment claims is now 70% higher than that for all other workers combined. See Figure 3.
Figure 3
Source: Century Foundation analysis
  • This stark skew is indicative of persistent impediments that Black workers face in the labor market—including employment discrimination, unequal pay, and occupational segregation in industries hardest hit by the pandemic, such as hospitality, tourism, entertainment, and other service sectors. These longstanding impediments are the reason that unemployment and underemployment among Black workers and other workers of color has often been double that of their white counterparts for decades.

Minimum Wage

Protesting NC Labor Commissioner’s Refusal to Protect Workers During the Pandemic, Coalition of Worker and Civil Rights Groups Launches Campaign to Elect Pro-Worker Labor Commissioner Candidate, Jessica Holmes

by | Sep 10, 2020 | Press-Release

Raleigh, North Carolina – Last week North Carolina’s Labor Commissioner helped kill a proposed executive order to protect meatpacking and farmworkers — the Labor Commissioner’s latest refusal to act to protect workers from COVID-19 during the pandemic. The action comes as a coalition of worker and racial justice groups launches a public education campaign highlighting the Labor Commissioner’s failures – and calling for the election of Jessica Homes in November as the new Labor Commission. Holmes has a long record of fighting for working families and has pledged strong action to protect North Carolina’s workers during the pandemic.

“While states like Virginia are making sure employers protect workers from COVID-19 on the job, North Carolina’s Labor Commissioner and legislature have done nothing during the pandemic – or frankly before it – to keep the state’s workers safe. North Carolina needs a labor commissioner like Jessica Holmes who will be a champion for working families,” said Phaedra Jackson, Deputy Campaigns Director for Working America.

North Carolina’s current labor commissioner, Cherie Berry, is retiring.  Democratic Wake County Commissioner Jessica Holmes and Republican state Representative Josh Dobson are running to replace her. North Carolina is one of just a few states where voters elect the state labor commissioner directly. Dobson has praised Berry’s record and said he would continue her approach. 

The current Labor Commissioner and the Republican-led legislature in which Dobson serves have done little to protect the state’s more than 4 million workers from COVID-19. The Labor Commissioner has received over 700 COVID-19-related safety and health complaints from terrified workers but has not inspected a single workplace during the pandemic and instead closed every case. As a result, COVID-19 has spread like wildfire through workplaces like poultry and meat processing plants that weren’t taking necessary precautions to protect their workers.

Unlike Virginia, North Carolina’s Labor Commissioner has refused to issue COVID-19 workplace standards to require employers to keep workers safe. Because President Trump’s US Department of Labor has also refused to issue COVID-19 workplace standards, North Carolina workers have no protections as they return to work.

The coalition launching the public education campaign to elect Jessica Holmes includes Advance Carolina, the North Carolina Association of Educators, Working America, BlackPAC, Poder NC Action, the Carolina Federation, and the National Employment Law Project Action Fund.

“As schools reopen, educators are on the frontlines of the COVID crisis. But the Labor Commissioner’s refusal to keep workers in schools and across the state safe is endangering all of us.  We need a Labor Commissioner like Jessica Holmes who will protect workers during the pandemic and help get everyone back to work once it’s over,” said Rukiya Dillahunt, education and labor activist with the North Carolina Association of Educators.

“Black workers in frontline jobs and their families are being put in danger by the Labor Commissioner’s refusal to do her job as COVID-19 has spread in workplaces across our State. Josh Dobson says he’ll continue the current approach if he is elected to replace her– which means further harm to the most critical employees in North Carolina. To keep workers safe we need a Labor Commissioner like Jessica Holmes who will protect workers during the pandemic and beyond, rather than maintaining the status quo,” said Marcus Bass, Executive Director of Advance North Carolina.

Black and Latinx workers in North Carolina have been hurt most by the Labor Commissioner’s refusal to act. They are the frontline and essential workers who have been put at greatest risk during the pandemic — and they make up a large share of workers in workplaces such as  meat processing plants whom the Labor Commissioner has failed to protect.

“Workers on farms and in meat and poultry plants are sustaining North Carolinians during the pandemic—yet many of their employers have failed to implement  the basic measures needed to protect them at work, resulting in widespread COVID-19 infection at work  and putting their communities at risk. It is outrageous that North Carolina’s labor commissioner last week blocked action to protect these workers — and has refused to mandate any COVID-19 standards for employers. That’s why North Carolina voters need to elect Jessica Holmes in November to keep the state’s workers safe,” said Debbie Berkowitz, Health and Safety Program Director at the National Employment Law Project Action Fund.

Dobson and the other leaders of the North Carolina legislature have blocked efforts to protect workers during the pandemic and for years before. They gave corporations that get their workers sick immunity from being held responsible. They refused to raise the state’s $7.25 minimum wage or to guarantee paid sick days for North Carolina workers, and blocked cities from taking action to help workers. 

Jessica Holmes, by contrast, is a labor and employment law attorney who has spent her career advocating for workers. After being elected as the youngest ever member of Wake County’s Board of Commissioner, she passed living wage, paid family leave and fair hiring rules for county and school employees. Holmes has pledged that as Labor Commissioner she will take action to protect North Carolinians during the pandemic and afterwards.  If elected, she would be the first Black woman to serve as a state labor commissioner.

* * *

Paid for by National Employment Law Project Action Fund, a project of Tides Advocacy.  Not authorized by a candidate.

Analysis of How Much Wisconsin Workers Are Losing Under Brad Schimel and Scott Walker’s Overtime Pay Cut

by | Sep 13, 2018 | Data Brief

While Wisconsin’s economy is growing, working families across the state are struggling, squeezed between flat paychecks and the rising cost of necessities. One factor dragging down paychecks is the erosion of overtime pay. The salary level below which workers are guaranteed overtime pay when they work more than 40 hours a week has not been updated in years, causing the share of salaried middle-class workers automatically eligible for overtime to plummet from 62 percent in 1975 to less than 7 percent today. [1]

Executive Summary

In 2016, the U.S. Department of Labor ordered a long overdue update to restore overtime pay protections to middle-class workers earning less than about $48,000 a year. However, this overtime pay raise was blocked in Wisconsin and nationwide as the result of a lawsuit brought by Wisconsin Attorney General Brad Schimel with the support of Governor Scott Walker. As a result of the lawsuit, hundreds of thousands of Wisconsinites lost out on overtime pay rights.

This report provides data for the first time on the local impact on Wisconsin workers of Attorney General Schimel’s action blocking this middle-class raise. Starting with state-level data available from the Economic Policy Institute, the report breaks down the impact, county by county.

The key findings include the following:

  • Statewide, 165,000 Wisconsinites lost overtime pay protections as a result of the lawsuit.
  • Workers in every county across the state lost overtime protections, including 23,000 in Milwaukee County, 14,000 in Dane County, and 8,500 in Green Bay’s Brown County.
  • Smaller communities also saw significant impacts, including about 6,400 in Appleton’s Outagamie County, 4,700 in La Crosse County, 4,600 in Oshkosh’s Winnebago County, 4,500 in Wassau’s Marathon County, 4,500 in Kenosha County, 3,900 in Eau Claire County, and 1,100 in Douglas County in the Superior/Duluth area.
  • As a result, this year and every year Wisconsin workers are losing $23 million in overtime raises. That’s $23 million in badly needed higher pay that workers across the state are losing ever year because of the lawsuit brought by Schimel to block the overtime raise that Walker also opposed.
  • In other states, including California, New York, Washington State, and Pennsylvania, governors and state legislatures are responding to the blocked federal overtime pay expansion by acting under state law to deliver this raise.
  • Wisconsin’s governor and legislature should follow those states’ lead and act quickly to deliver this badly needed overtime raise for the state’s workers.
  • In particular, under Wisconsin law, the governor, acting through the Wisconsin Department of Workforce Development, has the power to update overtime pay on his or her own without need for action by the legislature. Governors in Pennsylvania and Washington State are already doing so.
  • Past polling found that Wisconsin voters support an overtime pay expansion by an overwhelming 81 to 14 percent margin.

This report provides background on the overtime pay issue, presents the data on the impact across the state of blocking the overtime pay raise, and explains how Wisconsin’s governor or legislature can act to finally make these overtime raises happen.

  1. Background on the Lawsuit Blocking the Federal Overtime Pay Restoration

Despite a growing economy and record corporate profits and CEO pay, paychecks for most of the workforce are barely keeping up with the rising cost of living.[2] One of the reasons is eroding pay protections, including those for overtime pay.

It used to be that if you worked more than 40 hours a week, your employer would pay you time-and-a-half for those extra hours. There was an exemption for managers and professional employees, but only for workers who were both highly paid above a salary threshold and had specific management responsibilities or professional roles. Those protections ensured that most workers didn’t have to work excessive hours—and that if they did, they would receive extra pay to make up for it.

Back in 1975, the overtime salary threshold for that exemption was the equivalent of $61,200 a year, and 62 percent of salaried workers in the U.S. were automatically eligible for overtime pay.[3] Today, the level has plummeted to less than 7 percent because the salary threshold has been frozen at just $23,660 since 2004.[4] As a result, many low-paid employees like assistant managers at fast-food restaurants, retail stores, health insurance companies and the like who struggle on salaries of $25,000 to $45,000 a year aren’t eligible for overtime and can be forced to work 50, 60, or even 70 hours a week for no extra pay.

In 2016, the U.S. Department of Labor updated the overtime salary threshold to $47,476 a year—a moderate increase that would not even have fully restored overtime to the 62 percent of salaried workers who used to receive it.[5]

But a group of 21 state attorneys general, including Wisconsin’s Brad Schimel, sued and blocked this middle-class pay raise for their own constituents.[6] Scott Walker also vocally opposed the overtime pay raise and called for its repeal as part of his platform of labor “reforms.”[7]

While legal experts and even the Trump Administration believed the court’s ruling was erroneous and was likely to be reversed on appeal,[8] the administration announced in 2017 that the U.S. Department of Labor would rewrite the blocked overtime rule, most likely rolling back this long overdue pay raise and replacing it with weaker protections for fewer workers.[9] In September 2018, the Trump Labor Department scheduled a series of “listening sessions” as part of this effort to revise the rule and substitute weaker protections for fewer workers.[10]

Despite the rollback of the overtime restoration by Schimel, with Walker’s support, employer surveys show that 50 percent or more of national companies, including major retailers, restaurant chains, and banks, have already adopted the higher, updated overtime standards and adjusted their pay scales.[11] That shows that restoring overtime pay is economically realistic and would not entail a burdensome transition for businesses.

  1. The Impact of the Blocked Overtime Pay Restoration in Wisconsin—and the Benefits of Finally Delivering It

In this report we use state-level data from the Economic Policy Institute, the Bureau of Labor Statistics, and the U.S. Census Bureau to analyze for each county across Wisconsin how many workers lost overtime pay as a result of Schimel and Walker’s blocking the U.S. Labor Department’s overtime pay restoration—and how many would regain those protections if Wisconsin’s governor and/or legislature act to deliver this long overdue raise.

As summarized in Table 1, the data show that a total of 165,000 workers across Wisconsin lost overtime pay as a result of the Schimel lawsuit.

WISCONSIN Workers Who Lost Stronger Overtime Pay Protections:
164,795

Workers in every county across the state lost overtime protections, including 23,000 in Milwaukee County, 14,000 in Dane County, and 8,500 in Green Bay’s Brown County. Smaller communities also saw significant impacts, including about 6,400 in Appleton’s Outagamie County, 4,700 in La Crosse County, 4,600 in Oshkosh’s Winnebago County, 4,500 in Wassau’s Marathon County, 4,500 in Kenosha County, 3,900 in Eau Claire County, and 1,100 in Douglas County in the Superior/Duluth area. See Table 1.

A typical worker who lost out on expanded overtime pay was an assistant manager at a big-box retail store or a restaurant chain who earns $25,000 to $45,000 a year. Other affected workers include low-level, low-paid managers at banks, health insurance companies, and a wide range of other types of businesses.

These workers, of which there are many thousands in Wisconsin, would have had overtime pay restored under the 2016 U.S. Labor Department expansion if Schimel had not blocked it in court.

As Table 2 details, as a result, this year and every year Wisconsin workers are losing $23 million in overtime raises. That’s $23 million in badly needed higher pay that workers across the state are losing ever year because of the lawsuit brought by Schimel to block the overtime raise that Walker also opposed.

That figure for total lost pay combines projections for two types of lost raises.  The first is the total of estimated unpaid overtime hours being worked each year by workers who would have been covered under the updated overtime protections.  The second consists of estimated raises for workers whose employers would likely have raised their salaries up to the level of the new overtime threshold in order to keep them exempt from overtime requirements.

  1. Wisconsin’s Governor and Legislature Should Follow the Lead of Other States and Act Quickly to Deliver the Long Overdue Middle-Class Overtime Raise

In other states, including Pennsylvania, Washington State, California and New York, governors and state legislatures are responding to the blocked federal overtime pay expansion by acting under state law to deliver this raise. For example, Pennsylvania Governor Tom Wolf[12] and Washington State Governor Jay Inslee[13] this year both directed their state labor departments to update their overtime regulations to expand overtime pay—a process that is now underway in both states. California’s overtime salary threshold is already in the process of increasing to $62,400 a year by 2022.[14] And New York’s overtime salary threshold is increasing to $58,500 a year by late 2021 in the suburbs and by late 2018 in New York City, and by a date still to be determined in the reminder of the state.[15]

Wisconsin’s governor and legislature should follow those states’ lead and act quickly to deliver this badly needed overtime raise for the state’s workers. In particular, under Wisconsin law, the governor, acting through the Wisconsin Department of Workforce Development, may update the applicable overtime pay rules on his or her own without need for action by the legislature.[16] Wisconsin’s governor thus has the power to deliver the long overdue overtime raise, as governors are currently doing in Pennsylvania and Washington State.

Alternatively, the Wisconsin legislature also has the power to expand overtime pay. Past polling found that Wisconsin voters support an overtime pay expansion by an overwhelming 81 to 14 percent margin.[17]

Updating Wisconsin’s overtime rules would finally deliver this long overdue raise for 165,000 or more middle-class workers across the state.

Tables     

Table 1. Wisconsin Workers Statewide and by County Who Lost Stronger Overtime Pay Protections
Wisconsin 164,795
Adams County 380
Ashland County 594
Barron County 1,705
Bayfield County 370
Brown County 8,468
Buffalo County 300
Burnett County 362
Calumet County 1,157
Chippewa County 1,867
Clark County 848
Columbia County 1,562
Crawford County 677
Dane County 13,901
Dodge County 2,221
Door County 1,297
Douglas County 1,146
Dunn County 1,261
Eau Claire County 3,892
Florence County 107
Fond Du Lac County 2,980
Forest County 186
Grant County 1,400
Green County 1,233
Green Lake County 475
Iowa County 739
Iron County 183
Jackson County 495
Jefferson County 2,422
Juneau County 638
Kenosha County 4,522
Kewaunee County 538
La Crosse County 4,664
Lafayette County 325
Langlade County 693
Lincoln County 681
Manitowoc County 2,293
Marathon County 4,513
Marinette County 1,322
Marquette County 334
Menominee County 12
Milwaukee County 23,490
Monroe County 1,448
Oconto County 826
Oneida County 1,305
Outagamie County 6,442
Ozaukee County 2,747
Pepin County 162
Pierce County 760
Polk County 1,290
Portage County 2,320
Price County 426
Racine County 4,355
Richland County 493
Rock County 4,178
Rusk County 433
Sauk County 2,886
Sawyer County 539
Shawano County 1,126
Sheboygan County 3,461
St. Croix County 2,485
Taylor County 668
Trempealeau County 1,037
Vernon County 768
Vilas County 725
Walworth County 3,345
Washburn County 533
Washington County 3,578
Waukesha County 11,185
Waupaca County 1,521
Waushara County 574
Winnebago County 4,578
Wood County 2,350
Source: NELP Action analysis of data from the Bureau of Labor Statistics’ Quarterly Census of Employment and Wages (QCEW), the Economic Policy Institute and the Current Population Survey.

Table 2: Total Overtime Pay Raises Lost Per Year by Wisconsin Workers
$23,160,733
Source: NELP Action analysis of data from the Bureau of Labor Statistics’ Quarterly Census of Employment and Wages (QCEW), the Economic Policy Institute and the Current Population Survey.

Appendix: About the Data

The analysis in this report was prepared with data available from the Economic Policy Institute (EPI), and draws on state-level analyses by EPI of the impact of the 2016 U.S. Department of Labor overtime raise. Beginning with EPI’s estimates of statewide worker impact and its estimates of overtime pay lost annually, the analysis then used data from the Bureau of Labor Statistics’ Quarterly Census of Employment and Wages and the Current Population Survey to update those estimates to the present, and to estimate county-level impacts.

Endnotes

[1]        Economic Policy Institute, What’s at stake in the states if the 2016 federal raise to the overtime pay threshold is not preserved—and what states can do about it (Nov. 15, 2017), available at:  https://www.epi.org/publication/whats-at-stake-in-the-states-if-the-2016-federal-raise-to-the-overtime-pay-threshold-is-not-preserved/

[2]        “In U.S., wage growth is being wiped out entirely by inflation,” Washington Post (August 10, 2018), available at: https://www.washingtonpost.com/business/2018/08/10/america-wage-growth-is-getting-wiped-out-entirely-by-inflation/?utm_term=.364004afa05d

[3]        Economic Policy Institute, What’s at stake in the states if the 2016 federal raise to the overtime pay threshold is not preserved—and what states can do about it

[4]        Ibid.

[5]        “White Increases Overtime Eligibility by Millions,” New York Times (May 17, 2018), available at: https://www.nytimes.com/2016/05/18/business/white-house-increases-overtime-eligibility-by-millions.html

[6]        “Wisconsin joins 20 states to challenge federal overtime rule,” Capital Times (Sept. 20, 2016), available at: https://madison.com/ct/news/local/govt-and-politics/election-matters/wisconsin-joins-states-to-challenge-federal-overtime-rule/article_1c7808a3-bad2-50f1-a388-e575fa84f8ea.html

[7]        “Scott Walker wants every state to be a right-to-work state,” Washington Post (September 14, 2015), available at: https://www.washingtonpost.com/news/post-politics/wp/2015/09/14/scott-walker-wants-every-state-to-be-a-right-to-work-state/?utm_term=.479bff6b4b4b

[8]        “Labor Department to Appeal Court Ruling Striking Down Obama-Era Overtime-Pay Rule; Trump administration remains likely to significantly change regulations,” Wall Street Journal (Oct. 27, 2017), available at: https://www.wsj.com/articles/labor-department-to-appeal-court-ruling-striking-down-obama-era-overtime-rule-1509141625 See also Brief for Defendant-Appellant, Nevada v. U.S. Dep’t of Lab. No. 16-41606 (5th Cir. June 30, 2017).

[9]        ”Labor Department to Start Process of Revising Overtime Rule,” Wall Street Journal (July 25, 2017), available at: https://www.wsj.com/articles/labor-department-to-start-process-of-revising-overtime-rule-1501002130?mod=article_inline

[10]       U.S. Department of Labor, “White Collar Exemption Regulations; Public Listening Sessions,” 83 Federal Register 43825 (Aug. 28, 2018), available at: https://www.federalregister.gov/documents/2018/08/28/2018-18649/white-collar-exemption-regulations-public-listening-sessions

[11]       “The State and Fate of Overtime, ComplianceHR (Oct. 27, 2017), available at: http://event.lvl3.on24.com/event/15/06/73/3/rt/1/documents/resourceList1507125242509/web__chr__1004__final.pdf

[12]       “Pa. proposal would boost overtime for half a million workers,” Philadelphia Inquirer (June 26, 2018), available at http://www2.philly.com/philly/blogs/inq-phillydeals/overtime-labor-employment-trump-wolf-pennsylvania-overtime-20180626.html

[13]       Washington State Dep’t of Labor & Industries, Overtime EAP Rulemaking, available at https://lni.us.engagementhq.com/learn-about-eap-exemptions

[14]       “California’s Exempt Salary Threshold Will Rise Regardless of Blocked Overtime Rule,” Society for Human Resource Management (Dec. 15, 2016), available at  https://www.shrm.org/resourcesandtools/legal-and-compliance/state-and-local-updates/pages/overtime-california-employers.aspx

[15]       New York’s overtime salary threshold for the Executive and Administrative Exemption is increasing to $1,125 a week, which is $58,500 a year. See New York State Department of Labor, Miscellaneous Industry Wage Order Summary, available at: https://labor.ny.gov/formsdocs/wp/Part142.pdf ; New York State Department of Labor, Hospitality Industry Wage Order Summary, available at: https://labor.ny.gov/formsdocs/wp/Part146.pdf

[16]       Wisconsin’s overtime rules are established in large part by regulation, and exempt “persons whose primary duty consists of executive, administrative, or professional work.”  Wis. Admin. Code DWD 274.04. While the department’s current regulations defining those terms incorporate a $700 a week salary threshold, the governor and commissioner could update the regulations to raise the threshold.

[17]       Public Policy Polling, Wisconsin Survey Results (Aug. 26-28, 2016), available at: http://nelpaction.org/wp-content/uploads/2018/09/Wisconsin-Public-Policy-Survey-Results-Aug-2016.pdf

­

Analysis of How Much Nevada Workers Are Losing Under Attorney General Adam Laxalt and Wes Duncan’s Overtime Pay Cut

by | Sep 12, 2018 | Data Brief

While Nevada’s economy is growing, working families across the state are struggling, squeezed between flat paychecks and the rising cost of necessities. One factor dragging down paychecks is the erosion of overtime pay. The salary level below which workers are guaranteed overtime pay when they work more than 40 hours a week has not been updated in years, causing the share of salaried middle-class workers automatically eligible for overtime to plummet from 62 percent in 1975 to less than 7 percent today. [1]

Executive Summary

In 2016, the U.S. Department of Labor ordered a long overdue update to restore overtime pay protections to middle-class workers earning less than about $48,000 a year. However, this overtime pay raise was blocked in Nevada and nationwide as the result of a lawsuit brought by Nevada Attorney General Adam Laxalt and First Deputy Attorney General Wes Duncan. As a result of the lawsuit, tens of thousands of Nevadans lost out on overtime pay rights.

This report provides data for the first time on the local impact on Nevada workers of Attorney General Laxalt and First Deputy Duncan’s action blocking this middle-class raise. Starting with state-level data available from the Economic Policy Institute, the report breaks down the impact, county by county.

The key findings include:

  • Statewide, 104,000 Nevadans lost overtime pay protections as a result of Laxalt and Duncan’s lawsuit.
  • Workers in every county across the state lost overtime protections, including 78,000 workers in Clark County and 16,000 workers in Washoe County.
  • Smaller communities still saw significant impacts, including 1,900 workers in Carson City, 1,700 in Douglas County, 1,600 in Elko County and 1,100 workers in Lyon County.
  • As a result, this year and every year Nevada workers are losing $8 million in overtime raises. That’s $8 million in badly needed higher pay that workers across the state are losing ever year because of the lawsuit brought by Laxalt and Duncan to block the overtime raise.
  • In other states, including California, New York, Washington State, and Pennsylvania, governors and state legislatures are responding to the blocked federal overtime pay expansion by acting under state law to deliver this raise.
  • Nevada’s next governor and new legislature should follow those states’ lead and act quickly to deliver this badly needed overtime raise for the state’s workers.
  • In particular, under Nevada law, the governor, acting through the Nevada Labor Commissioner, has the power to update overtime pay on his or her own without need for action by the legislature. Governors in Pennsylvania and Washington State are already doing so.

This report provides background on the overtime pay issue, presents the data on the impact across the state of blocking the overtime pay raise, and explains how Nevada’s governor and legislature can act to finally make these overtime raises happen.

  1. Background on the Lawsuit Blocking the Federal Overtime Pay Restoration

Despite a growing economy and record corporate profits and CEO pay, paychecks for most of the workforce are barely keeping up with the rising cost of living.[2] One of the reasons is eroding pay protections, including those for overtime pay.

It used to be that if you worked more than 40 hours a week, your employer would pay you time-and-a-half for those extra hours. There was an exemption for managers and professional employees, but only for workers who were both highly paid above a salary threshold and had specific management responsibilities or professional roles. Those protections ensured that most workers didn’t have to work excessive hours—and that if they did, they would receive extra pay to make up for it.

Back in 1975, the overtime salary threshold for that exemption was the equivalent of $61,200 a year, and 62 percent of salaried workers in the U.S. were automatically eligible for overtime pay.[3] Today, the level has plummeted to less than 7 percent because the salary threshold has been frozen at just $23,660 since 2004.[4] As a result, many low-paid employees like assistant managers at fast-food restaurants, retail stores, health insurance companies and the like who struggle on salaries of $25,000 to $45,000 a year aren’t eligible for overtime and can be forced to work 50, 60, or even 70 hours a week for no extra pay.

In 2016, the U.S. Department of Labor updated the overtime salary threshold to $47,476 a year—a moderate increase that would not even have fully restored overtime to the 62 percent of salaried workers who used to receive it.[5]

But a group of 21 state attorneys general, led by Nevada’s Adam Laxalt and his deputy Wes Duncan, sued and blocked this middle-class pay raise for their own constituents.[6]

While legal experts and even the Trump Administration believed the court’s ruling was erroneous and was likely to be reversed on appeal,[7] the administration announced in 2017 that the U.S. Department of Labor would rewrite the blocked overtime rule, most likely rolling back this long overdue pay raise and replacing it with weaker protections for fewer workers.[8] In September 2018, the Trump Labor Department scheduled a series of “listening sessions” as part of this effort to revise the rule and substitute weaker protections for fewer workers.[9]

Despite the rollback of the overtime restoration by Laxalt and Duncan, employer surveys show that 50 percent or more of national companies, including major retailers, restaurant chains, and banks, have already adopted the higher, updated overtime standards and adjusted their pay scales.[10] That shows that restoring overtime pay is economically realistic and would not entail a burdensome transition for businesses.

  1. The Impact of the Blocked Overtime Pay Restoration in Nevada—and the Benefits of Finally Delivering It

In this report we use state-level data available from the Economic Policy Institute, the Bureau of Labor Statistics, and the U.S. Census Bureau to analyze for each county across Nevada how many workers lost overtime pay as a result of Laxalt and Duncan’s  blocking the U.S. Labor Department’s overtime pay restoration—and how many would regain those protections if Nevada’s governor and/or legislature act to deliver this long overdue raise.

As summarized in Table 1, the data show that a total of 104,000 workers across Nevada lost overtime pay as a result of the Laxalt and Duncan lawsuit.

Workers in every county across the state lost overtime protections, including 78,000 workers in Clark County and 16,000 workers in Washoe County. Smaller communities still saw significant impacts, including 1,900 workers in Carson City, 1,700 in Douglas County, 1,600 in Elko County and 1,100 workers in Lyon County. See Table 1.

A typical worker who lost out on expanded overtime pay was an assistant manager at a big-box retail store or a restaurant chain who earns $25,000 to $45,000 a year. Other affected workers include low-level, low-paid managers at banks, health insurance companies, and a wide range of other types of businesses.

These workers, of which there are many thousands in Nevada would have had overtime pay restored under the 2016 U.S. Labor Department expansion if Laxalt and Duncan had not blocked it in court.

As Table 2 details, as a result, this year and every year Nevada workers are losing $8 million in overtime raises. That’s $8 million in badly needed higher pay that workers across the state are losing ever year because of the lawsuit brought by Laxalt and Duncan to block the overtime raise.

That figure for total lost pay combines projections for two types of lost raises.  The first is the total of estimated unpaid overtime hours being worked each year by workers who would have been covered under the updated overtime protections.  The second consists of estimated raises for workers whose employers would likely have raised their salaries up to the level of the new overtime threshold in order to keep them exempt from overtime requirements.

  1. Nevada’s Governor and Legislature Should Follow the Lead of Other States and Act Quickly to Deliver the Long Overdue Middle-Class Overtime Raise

In other states, including Pennsylvania, Washington State, California and New York, governors and state legislatures are responding to the blocked federal overtime pay expansion by acting under state law to deliver this raise. For example, Pennsylvania Governor Tom Wolf[11] and Washington State Governor Jay Inslee[12] this year both directed their state labor departments to update their overtime regulations to expand overtime pay—a process that is now underway in both states. California’s overtime salary threshold is already in the process of increasing to $62,400 a year by 2022.[13] And New York’s overtime salary threshold is increasing to $58,500 a year by late 2021 in the suburbs and by late 2018 in New York City, and by a date still to be determined in the reminder of the state.[14]

NEVADA Workers Who Lost Stronger Overtime Pay Protections:

104,339

Updating Nevada’s overtime rules would finally deliver this long overdue raise for 104,000 or more middle-class workers across the state.Nevada’s governor and legislature should follow those states’ lead and act quickly to deliver this badly needed overtime raise for the state’s workers. In particular, under Nevada law, the governor, acting through the Nevada Labor Commissioner, may update the applicable overtime pay rules on his or her own without need for action by the legislature.[15] Nevada’s governor thus has the power to deliver the long overdue overtime raise, as governors are currently doing in Pennsylvania and Washington State. Alternatively, the Nevada legislature also has the power to expand overtime pay.

Tables

Table 1. Nevada Workers Statewide and by County Who Lost Stronger Overtime Pay Protections
State/County Total workers affected
Nevada 104,339
Carson City 1,871
Churchill County 648
Clark County 78,106
Douglas County 1,717
Elko County 1,565
Esmeralda County N/A
Eureka County 115
Humboldt County 392
Lander County 101
Lincoln County 115
Lyon County 1,103
Mineral County 94
Nye County 754
Pershing County 71
Storey County 497
Washoe County 16,994
White Pine County 197
Source: NELP Action analysis of data from the Bureau of Labor Statistics’ Quarterly Census of Employment and Wages (QCEW), the Economic Policy Institute and the Current Population Survey.

Table 2: Total Overtime Pay Raises Lost Per Year by Nevada Workers
$8,404,652
Source: NELP Action analysis of data from the Bureau of Labor Statistics’ Quarterly Census of Employment and Wages (QCEW), the Economic Policy Institute and the Current Population Survey.

 

Appendix: About the Data

The analysis in this report was prepared with data available from the Economic Policy Institute (EPI), and draws on state-level analyses by EPI of the impact of the 2016 U.S. Department of Labor overtime raise. Beginning with EPI’s estimates of statewide worker impact and its estimates of overtime pay lost annually, the analysis then used data from the Bureau of Labor Statistics’ Quarterly Census of Employment and Wages and the Current Population Survey to update those estimates to the present, and to estimate county-level impacts.

Endnotes

[1]           Economic Policy Institute, What’s at stake in the states if the 2016 federal raise to the overtime pay threshold is not preserved—and what states can do about it (Nov. 15, 2017), available at:  https://www.epi.org/publication/whats-at-stake-in-the-states-if-the-2016-federal-raise-to-the-overtime-pay-threshold-is-not-preserved/

[2]           “In U.S., wage growth is being wiped out entirely by inflation,” Washington Post (August 10, 2018), available at: https://www.washingtonpost.com/business/2018/08/10/america-wage-growth-is-getting-wiped-out-entirely-by-inflation/?utm_term=.364004afa05d

[3]           Economic Policy Institute, What’s at stake in the states if the 2016 federal raise to the overtime pay threshold is not preserved—and what states can do about it

[4]           Ibid.

[5]           “White Increases Overtime Eligibility by Millions,” New York Times (May 17, 2018), available at: https://www.nytimes.com/2016/05/18/business/white-house-increases-overtime-eligibility-by-millions.html

[6]           Office of the Nevada Attorney General, Press Release, Nevada Attorney General Adam P. Laxalt Applauds Ruling Permanently Invalidating Obama-Era Overtime Rule (Aug. 31, 2017), available at: http://ag.nv.gov/News/PR/2017/Nevada_Attorney_General_Adam_P__Laxalt_Applauds_Ruling_Permanently_Invalidating_Obama-Era_Overtime_Rule/

[7]           “Labor Department to Appeal Court Ruling Striking Down Obama-Era Overtime-Pay Rule; Trump administration remains likely to significantly change regulations,” Wall Street Journal (Oct. 27, 2017), available at: https://www.wsj.com/articles/labor-department-to-appeal-court-ruling-striking-down-obama-era-overtime-rule-1509141625 See also Brief for Defendant-Appellant, Nevada v. U.S. Dep’t of Lab. No. 16-41606 (5th Cir. June 30, 2017).

[8]           ”Labor Department to Start Process of Revising Overtime Rule,” Wall Street Journal (July 25, 2017), available at: https://www.wsj.com/articles/labor-department-to-start-process-of-revising-overtime-rule-1501002130?mod=article_inline

[9]           U.S. Department of Labor, “White Collar Exemption Regulations; Public Listening Sessions,” 83 Federal Register 43825 (Aug. 28, 2018), available at: https://www.federalregister.gov/documents/2018/08/28/2018-18649/white-collar-exemption-regulations-public-listening-sessions

[10] “The State and Fate of Overtime, ComplianceHR (Oct. 27, 2017), available at: http://event.lvl3.on24.com/event/15/06/73/3/rt/1/documents/resourceList1507125242509/web__chr__1004__final.pdf

[11] “Pa. proposal would boost overtime for half a million workers,” Philadelphia Inquirer (June 26, 2018), available at http://www2.philly.com/philly/blogs/inq-phillydeals/overtime-labor-employment-trump-wolf-pennsylvania-overtime-20180626.html

[12] Washington State Dep’t of Labor & Industries, Overtime EAP Rulemaking, available at https://lni.us.engagementhq.com/learn-about-eap-exemptions

[13] “California’s Exempt Salary Threshold Will Rise Regardless of Blocked Overtime Rule,” Society for Human Resource Management (Dec. 15, 2016), available at https://www.shrm.org/resourcesandtools/legal-and-compliance/state-and-local-updates/pages/overtime-california-employers.aspx

[14]         New York’s overtime salary threshold for the Executive and Administrative Exemption is increasing to $1,125 a week, which is $58,500 a year. See New York State Department of Labor, Miscellaneous Industry Wage Order Summary, available at: https://labor.ny.gov/formsdocs/wp/Part142.pdf ; New York State Department of Labor, Hospitality Industry Wage Order Summary, available at: https://labor.ny.gov/formsdocs/wp/Part146.pdf

[15]         Nev. Rev. Stat. Ann. § 608.018(3)(d) exempts “employees who are employed in in bona fide executive, administrative, or professional capacities” from overtime pay. The commissioner’s current regulations, Nev. Admin Code 608.125(c), instruct that “the Commissioner will refer to [the U.S. DOL’s overtime exemption] 29 C.F.R. §§ 541.1 and 541.2 to determine if an employee is employed in a bona fide executive or administrative capacity.” However, the governor and commissioner could update the regulations to delink them from the federal standard and adopt a higher salary threshold.

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