);

2023-2024 State and Local Policy Agenda

Executive Summary

In the current uncertain economic environment, U.S. workers face serious threats, from eroding wages and unfair firings to union busting and entrenched occupational segregation based on race and gender. In response, workers are organizing and fighting back. Workers are demanding new policies to strengthen their power, raise labor standards, and crack down on abuses. With the very real prospect of federal gridlock, the best opportunities to advance a pro-worker, pro-equity agenda will likely be at the state and local level. This agenda outlines a range of policy responses that state and local governments are now taking to protect workers. These best practices from across the country provide a roadmap for how legislatures, governors, mayors, and city councils can promote a good jobs economy in the coming years.

  1. Empower workers to organize unions, collectively bargain, and protect their rights in the workplace.

The unequal power between workers and employers has hurt working families for decades. Increasing the power of workers is essential to create an economy that works for all.

a. Restore worker bargaining power by extending full collective bargaining rights to all workers. Enact state policies protecting union rights and requiring employers to collectively bargain with workers who form unions in public-sector, agricultural, or domestic occupations that otherwise lack coverage under federal labor laws due to longstanding racist exclusions. Repeal existing state bans or constraints on public-sector collective bargaining or strikes;

b. Repeal “right-to-work” laws designed to weaken unions;

c. Ensure all workers have access to unemployment insurance while on strike;

d. Adopt “temp worker bill of rights” laws to give contracted workers employed by temp and staffing agencies the right to refuse assignments as strike breakers.

e. Establish sectoral standards boards with authority to bring employers, workers, and community stakeholders together to set wages and working conditions in essential jobs and sectors with poor working conditions.

f. Leverage state contracting and purchasing power to increase worker power on projects and services funded with public dollars.

  1. Make effective federal and state pandemic policies permanent.

Important policy responses to the economic impact of the pandemic made the COVID downturn both shorter-lived and less painful for working families than the Great Recession. Many of these measures were temporary but have proven their usefulness and should be made permanent at the state level.

a. Permanently expand unemployment insurance for all workers—including app-based workers, self-employed persons, part-time workers, and undocumented workers;

b. Rebuild unemployment insurance trust funds through progressive employer payroll taxes that shift the burden of financing these vital systems away from small employers and ensure adequate benefits of sufficient duration for workers during the next economic crisis and beyond;

c. Permanently expand paid sick leave and paid family and medical leave;

d. Permanently expand anti-retaliation protections to ensure that worker whistleblowers can speak up about dangerous working conditions and other mistreatment; and

e. Enact state-level fully refundable child tax credits.

  1. Raise wages and improve job quality to help workers and families thrive.

Bad jobs are a policy choice. Policymakers have tools available to ensure high quality jobs in every state.

a. As the highest inflation in 40 years erodes paychecks and squeezes families, states and cities need to raise the minimum wage well beyond $15, establish automatic annual adjustments so that wages keep up with the cost of living, close sexist and racist labor law exemptions that exclude many workers from the protection of the minimum wage, and restore access to overtime pay, including for farmworkers, education workers, and others who have long been excluded from this basic protection;

b. Fight wage theft and enforce minimum wage laws, overtime laws, and other labor standards and protections. Support co-enforcement models at the local level;

c. Ensure all workers have full labor and employment rights, including rights to organize and bargain, by preventing employers from mislabeling workers as “independent contractors.” Adopt clear and strong legal definitions (e.g., the “ABC test”) for determining employee status. Strengthen state enforcement and penalties for employers who illegally misclassify workers;

d. Protect contracted temp and staffing workers in our fissured economy by adopting temp and staffing agency worker protection laws and issuing clear guidance stating that the businesses that control their work are “joint employers” and thus responsible for their working conditions;

e. Fight forced arbitration requirements and other coercive waivers in employment contracts that prevent workers from enforcing their rights by adopting “qui tam” laws (which give workers or organizations the ability to bring enforcement actions on behalf of the state). Ban noncompete agreements, no-poaching requirements, independent contractor waivers (purporting to waive an individual’s employment status), and COVID-19 liability waivers;

f. Protect workers from abusive workloads and intrusive workplace monitoring and surveillance practices that are causing sky-high worker injury rates, worsening workplace inequities, and magnifying power imbalances between workers and employers;

g. As dangerous heat, fires, flooding, and storms become more frequent, guarantee workers the right to refuse to work under such dangerous conditions or during declared emergencies. Adopt OSHA heat standards and other protections against workplace climate hazards;

h. End arbitrary and retaliatory firings with “just cause” employment protections, replacing the “at-will” system that gives employers inordinate control over workers’ livelihoods. As part of these policies, guarantee all workers severance pay and regulate the growing use of electronic monitoring in the workplace and its use in employee discipline and discharge;

i. Repeal abusive state preemption laws that prohibit cities and counties from enacting additional worker protections like higher minimum wages, rent control, and fair scheduling ordinances;

j. Protect immigrant workers from exploitation by prohibiting retaliation against immigrants who report wage theft and other abuses, preventing employer abuses of the employment verification process, and expanding access to drivers and professional licenses; and

k. Provide public investment to increase wages and improve working conditions for workers in all sectors of the care economy, including residential long-term care facility workers, child care workers, and home healthcare workers.

  1. Promote equitable access to jobs for Black and Hispanic workers, who are hit hardest by occupational segregation, high unemployment, mass incarceration, and negative effects of COVID-19.

Race-blind policies do not exist. Policymakers need to actively tackle structural racism in every part of society.

a. Promote access to good jobs for Black, brown, and low-income communities by adopting targeted local hiring policies and strong labor standards for publicly funded infrastructure and green economy projects;

b. Fight racial and gender discrimination and occupational segregation with stronger civil rights protections and data gathering;

c. Promote fair hiring for people with arrest or conviction records by adopting fair chance hiring and clean slate reforms (which prevent early disclosure of records in the hiring process and expunge records after a certain period), removing occupational licensing barriers, and ending unfair fees and fines imposed by the criminal justice system for traffic and other violations that trap workers in endless cycles of debt; and

d. Introduce policies to reduce racial disparities in wealth, including Baby Bonds.

  1. Ensure states and cities have the resources they need to rebuild and sustain high-quality public services.

The pandemic crisis is behind us, but that does not mean that most communities are better off. Schools, hospitals, transit systems, and other public services remain severely weakened by the pandemic’s impact—and in most places, a return to the pre-pandemic status quo is insufficient. We must build a rejuvenated public sector that meets the needs of every community. State policymakers can also do their part to make investments that support green jobs and address climate impacts.

a. Restore the public-sector workforce by increasing compensation for public-sector jobs, especially in public education, and supporting collective bargaining;

b. Address the shortage of teachers and other education staff by fully funding primary and secondary education and raising wages; and,

c. Crack down on wasteful corporate giveaways by granting taxpayer-funded incentives only to businesses and development projects that produce specific, negotiated community benefits such as affordable housing and family-sustaining jobs for local residents.

Read the full 2023-2024 State and Local Policy Agenda here.

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

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

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

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     

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

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