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
Georgia and the entire country remain in one of the worst unemployment crises in modern U.S. history. Even as Georgia’s economy began to reopen this fall, the COVID-19 pandemic and resulting recession are continuing to cause as many or more Georgians to lose their jobs each month as we saw during the worst weeks of the Great Recession. See Figure 1 – in which the upper blue line shows weekly new unemployment claims in Georgia this year, while the lower orange line shows the level in Georgia at the peak of the Great Recession.
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
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.
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
Because Mitch McConnell’s Senate majority—with the support of Senator Perdue and Senator Loeffler—has also been blocking all efforts to raise the minimum wage, it has been frozen since 2009, the longest period ever without a minimum wage increase since the federal minimum wage was enacted in 1938. At just $7.25 an hour, the value of the federal minimum wage today in inflation-adjusted dollars is lower than it was in the early 1960s.
If Senators Perdue and Loeffler are elected on January 5th and Mitch McConnell remains Senate Majority Leader, the federal minimum wage is likely to remain frozen at $7.25 per hour. During his six years as majority leader, McConnell has consistently blocked any minimum wage increase from being considered or passed by the Senate.
The U.S. Chamber of Commerce, one of the top corporate lobby groups opposed to raising the minimum wage, is spending millions to ensure that Senators Perdue and Loeffler keep their seats—so they and Mitch McConnell can continue blocking efforts to raise the minimum wage.
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 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.
“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.
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.
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.
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.
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.
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/
[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
[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.
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.
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.
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.
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/
[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
[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.
While Ohio’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 Ohio and nationwide as the result of a lawsuit brought by Ohio Attorney General Mike DeWine. As a result of the lawsuit, hundreds of thousands of Ohioans lost out on overtime pay rights.
This report provides data for the first time on the local impact on Ohio workers of Attorney General DeWine’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, 327,000 Ohioans lost overtime pay protections as a result of the lawsuit.
Workers in every county across the state lost overtime protections. The largest impacts were 37,000 workers in Franklin County, 34,000 in Cuyahoga County, and 22,000 in Hamilton County.
Other major impacts include 17,000 in Montgomery County, 16,000 workers in Summit County, 13,000 in Lucas County, and 13,000 in Stark County.
As a result, this year and every year Ohio workers are losing $42 million in overtime raises. That’s $42 million in badly needed higher pay that workers across the state are losing ever year because of the lawsuit brought by DeWine 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.
Ohio’s governor and legislature should follow those states’ lead and act quickly to deliver this badly needed overtime raise for the state’s workers.
Past polling found that Ohio voters support an overtime pay expansion by an overwhelming 80 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 Ohio’s governor and legislature can act to finally make these overtime raises happen.
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 Ohio’s Mike DeWine, 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 DeWine, 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.
The Impact of the Blocked Overtime Pay Restoration in Ohio—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 Ohio how many workers lost overtime pay as a result of DeWine’s blocking the U.S. Labor Department’s overtime pay restoration—and how many would regain those protections if Ohio’s governor and legislature act to deliver this long overdue raise.
As summarized in Table 1, the data show that a total of 327,000 workers across Ohio lost overtime pay as a result of the DeWine lawsuit.
OHIO Workers Who Lost Stronger Overtime Pay Protections:
327,063
Workers in every county across the state lost overtime protections. The largest impacts were 37,000 workers in Franklin County, 34,000 in Cuyahoga County, and 22,000 in Hamilton County. Other major impacts include 17,000 in Montgomery County, 16,000 workers in Summit County, 13,000 in Lucas County, and 13,000 in Stark 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 Ohio, would have had overtime pay restored under the 2016 U.S. Labor Department expansion if DeWine had not blocked it in court.
As Table 2 details, as a result, this year and every year Ohio workers are losing $42 million in overtime raises. That’s $42 million in badly needed higher pay that workers across the state are losing ever year because of the lawsuit brought by DeWine 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 part 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.
Ohio’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]
Legislation was introduced this session in the Ohio legislature calling for restoring overtime pay.[15] Ohio’s governor and legislature should follow those states’ lead and act quickly to deliver this badly needed overtime raise for the state’s workers.
Past polling found that Ohio voters support an overtime pay expansion by an overwhelming 80 to 14 percent margin.[16]
Updating Ohio’s overtime rules would finally deliver this long overdue raise for 327,000 or more middle-class workers across the state.
Tables
Table 1. Ohio Workers Statewide and by County Who Lost Stronger Overtime Pay Protections
State/County
Total workers affected
Ohio
327,063
Adams County
459
Allen County
3,647
Ashland County
1,592
Ashtabula County
2,809
Athens County
1,652
Auglaize County
1,530
Belmont County
1,918
Brown County
693
Butler County
9,185
Carroll County
550
Champaign County
791
Clark County
4,012
Clermont County
4,176
Clinton County
1,161
Columbiana County
2,773
Coshocton County
886
Crawford County
1,244
Cuyahoga County
34,201
Darke County
1,593
Defiance County
1,053
Delaware County
4,367
Erie County
3,348
Fairfield County
3,938
Fayette County
1,249
Franklin County
36,711
Fulton County
1,456
Gallia County
991
Geauga County
2,673
Greene County
3,922
Guernsey County
1,228
Hamilton County
21,894
Hancock County
2,811
Hardin County
740
Harrison County
255
Henry County
799
Highland County
1,011
Hocking County
698
Holmes County
1,863
Huron County
1,711
Jackson County
976
Jefferson County
1,582
Knox County
1,581
Lake County
6,552
Lawrence County
1,179
Licking County
4,056
Logan County
1,307
Lorain County
7,129
Lucas County
13,361
Madison County
1,226
Mahoning County
8,903
Marion County
1,873
Medina County
4,533
Meigs County
339
Mercer County
1,674
Miami County
3,132
Monroe County
256
Montgomery County
16,526
Morgan County
225
Morrow County
358
Muskingum County
2,775
Noble County
250
Ottawa County
973
Paulding County
425
Perry County
511
Pickaway County
904
Pike County
538
Portage County
3,840
Preble County
908
Putnam County
1,044
Richland County
4,695
Ross County
1,905
Sandusky County
2,162
Scioto County
2,107
Seneca County
1,826
Shelby County
1,548
Stark County
12,880
Summit County
15,992
Trumbull County
5,302
Tuscarawas County
3,130
Union County
1,340
Van Wert County
993
Vinton County
175
Warren County
4,942
Washington County
1,651
Wayne County
3,297
Williams County
1,438
Wood County
4,469
Wyandot County
685
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 Ohio Workers
$42,099,593
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.
[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
[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
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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.
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.
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 Ohio and nationwide as the result of a lawsuit brought by Ohio Attorney General Mike DeWine. As a result of the lawsuit, hundreds of thousands of Ohioans lost out on overtime pay rights.