Trump’s Overtime Proposal Won’t Help Many People

The Trump administration recently touted its strides to help workers by starting the process to raise the overtime threshold through regulation. While the administration’s proposal attempts to raise wages for millions of workers, including many in Colorado, there’s a problem many advocates anticipated — one that will leave millions of workers, who need support, stranded.

The law governing overtime pay, known as the Fair Labor Standards Act (FLSA), dates back to the Great Depression. The idea behind the specific overtime protection section is salaried workers — specifically those not in managerial or high-level positions — should be properly compensated for working more than 40 hours per week. The Department of Labor put a salary threshold in place saying any worker earning less than that while in a non-managerial role would be compensated time and a half for hours worked over 40 per week. Through the mid 1970s, that number was regularly updated to reflect inflation, as well as changing costs of living and standards. Since that time, however, the number has fallen woefully out of date and now sits at only $23,660. That means workers making above that number are ineligible for overtime pay.

The Obama administration attempted to rectify this problem by proposing to raise the salary threshold to $47,476 — partially restoring it to the mid 1970s standard, adjusted to inflation — only to see it shot down by an activist court. Now the Trump administration is proposing to raise it to $35,308. Let’s put that number in perspective for Colorado:

  • The 40th percentile wage in Colorado is $51,948, nearly $17,000 less than the Trump administration proposal.
  • The federal poverty line for a two-parent, two-child household is just $24,339.
  • Our middle class study from last year shows to be on the very edge of middle income in Colorado, it takes a $36,800 salary in urban areas and a $30,900 salary in rural areas, meaning the Trump administration proposal would apply to almost no one in middle-income jobs, the people who have seen their wages stall the most.

We need a salary threshold that’s more commensurate with the middle class. We have seen policies that help the workers on the lowest end of the income ladder, like raising the minimum wage, but we need more policies that help the middle-income earners. Trump’s proposal doesn’t do that.

The good news is Colorado can, and should, move on its own to raise the threshold for what is best for our state’s workers. If Colorado adopts the Obama standard — which was tied to the low wages of the Southern region — more than $517,000 a week would be put into the pockets of mostly middle class workers. An additional 250,000 salaried workers would get paid for the hours they work. If we go further and update the 1975 standard — the last time the threshold was adjusted for inflation — then the threshold would be $53,782, helping thousands more in Colorado.

There are too many workers who are being left behind and who deserve to be fully compensated for their work. Unfortunately, it seems the federal government is uninterested in leading on this issue. It’s up to Colorado and our elected leaders to step forward and help workers in our state stay ahead.

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