By Andrea Hsu
Imagine a raise, only to be told weeks later: Sorry, we’re taking it back.
That’s what happened to 306 employees at Ohio State University that a federal court dismissed. The excessive work order of the Biden administration.
The rule, finalized in April, would have entitled about 4.3 million salaried workers nationwide to 1.5 times their regular wages for working more than 40 hours a week.
Jessica Looman, head of the Labor Department’s Wage and Hour Division, wrote: “One of the founding principles of the American workplace is that a hard day’s work deserves a fair day’s pay.” blog post explaining the rule.
The rule went into effect on July 1, when salaried workers earning less than $43,888 a year became automatically eligible for overtime, a significant increase from the previous threshold of $35,568.
A more significant jump would occur on January 1, 2025, when that threshold would rise to $58,656, with automatic updates every three years, based on current salary data.
Employers across the country apparently had two choices: start paying eligible workers overtime or raise their wages above the new threshold.
Ohio, which has a workforce of more than 50,000, decided to do some of both: It moved some workers from “exempt” status to “non-exempt” status, so they can earn overtime. And it has helped others across the institution, including people who work in academia, athletics, the university’s medical center and elsewhere.
For the 306 people who would have been eligible for overtime on January 1, those raises came early — on November 1.
But their life was short.
The court order is reversed
On Nov. 15, U.S. District Judge Sean D. Jordan of the Eastern District of Texas ruled that the Labor Department overstepped its authority in granting the overtime, saying the new wage cap was too high. automatic update.
Given the millions of workers and the large number of employers who would be affected by the rule, he wrote, it would be “impossible, if not impossible” to reasonably accommodate it. So he dropped the rule entirely.
A week later, Ohio State delivered the bad news. In emails sent out late Friday afternoon, 306 newly paid employees were told that “as a result of the law change, you will no longer receive an increase in your base salary.”
As a consolation, they were told they could keep the increases until the end of this year.
“A Punch in the Gut”
One of those employees, an administrative worker who asked not to be named for fear of retaliation, described the move as a “punch in the gut.”
The salary for the employee who supervises 130 student workers exceeded the new salary cap, rising from $55,100 to $58,700.
The employee said that by canceling the raise, Ohio State sent a discouraging message: “We don’t value you. What you are doing is not worth increasing.”
According to the university, the pay raises for 306 employees will cost $2,047,000, a small fraction of its $10 billion budget.
“We know this is disappointing,” university officials wrote in letters to employees. “Given the changes in the law, we will continue to focus on impact and decisions that take all of our employees and the university into account.”
Echoes of 2016
The Labor Department has appealed the federal court ruling, but that won’t lead to any reinstatement of overtime before Jan. 20, when President-elect Donald Trump takes office on what is expected to be a very different agenda.
What is happening now is reminiscent of what happened eight years ago, at the tail end of the Obama administration.
Under President Barack Obama, the Labor Department also attempted to extend overtime protections to nearly 4 million workers by raising the wage threshold set in 2004 from $23,660 to $47,476. A federal judge blocked the rule a week before it was set to take effect on Dec. 1, 2016.
Recognizing that the 2004 cap was outdated, the Trump administration in 2019 released its overtime rule and set a new wage cap of $35,568, which the worker called “inappropriately low.”
With the repeal of the Biden rule in November, the cap is back in effect, giving many employers a sense of relief.
A nonprofit overtime lawsuit
Until last month, Carrie Lucas, president of the Independent Women’s Forum, a conservative nonprofit, was weighing her options.
His staff of 35 includes six recent college graduates, each earning well below the new overtime threshold. Raising their salaries just above the cap would cost the organization about $60,000.
“It’s like somebody’s full salary,” Lucas said. “We had to get rid of one of those young ladies.”
But without the increase, they would be able to receive overtime pay from January 1.
Last summer, the Independent Women’s Forum held a Take Back Title IX bus tour. Here, famous athletes, including swimmer Riley Gaines and tennis veteran Martina Navratilova, have campaigned against the inclusion of transgender athletes in women’s sports.
“Thirty states in 30 days and all these rallies all over the place,” says Lucas. “The hours were crazy.”
Still, Lucas says the assignment excited many of his employees, especially young people who don’t have family responsibilities at home.
One employee in particular pulled him out of the park, Lucas said, working the length of the bus tour. In the end, he was rewarded with a bonus.
“It was such an experience. But all that caution, all that opportunity to knock my socks off and think you’re capable of more than I thought—all of that would be gone,” Lucas said.
“From an HR perspective, the solution would be: You can’t go.”
For many workers, overwork causes stress
Of course, for most salaried employees, overtime doesn’t mean traveling the country with celebrities and working on issues you’re passionate about.
In public comments Salaried workers introduced during the legislative period described the physical and mental strain of working 50 to 60 hours a week, often missing family events due to unpredictable schedules without any extra pay.
“I don’t have to make these sacrifices to pay my debts. If I have to miss out on something important to my kids, I should at least be compensated for it,” wrote a worker from Arkansas. He described himself as a single father making $50,000 a year as a service manager at a farm equipment dealership.
The left-leaning Economic Policy Institute notes that in 1975, more than 60% of full-time wage earners were eligible for overtime pay. But over the decades, as earnings rose and regulation failed to keep pace, the share of covered workers fell sharply—to 7% by 2016.
The Obama administration’s overtime regime would cover about a third of full-time salaried workers. Millions of people have benefited under the Trump administration that replaced him.
Although Trump campaigned for a second term on a promise of prosperity for workers, few expect him to defend the Biden rule. Like last time, it’s unclear if he’ll be looking for an update of his own. Trump’s team did not respond when NPR asked about his overtime policy during the campaign.
Project 2025, the second Trump administration’s conservative plan, proposes changes to overtime protections that would go in the opposite direction and dramatically reduce the number of workers receiving overtime pay.
One proposal would allow employers to count overtime over a longer period of time, so workers would earn 1.5 times their regular pay after just exceeding 80 hours in a two-week period. Another would give employers and employees the option of compensatory time instead of overtime pay.
