Pretty soon, Donald Trump may get to decide whether 4 million workers will get extra pay when they work long hours. You might say the president-elect has a dog in this fight. After all, some of those people surely work for Trump and his children.
It’s a perfect illustration of the president-elect’s thicket of conflicts ― all the more so because it’s not as glaring as some of the others.
Earlier this year, President Barack Obama reformed our country’s overtime rules to make them more generous to workers. Under the changes, pretty much any salaried worker who earns less than $47,476 per year will be guaranteed time-and-a-half pay when they work more than 40 hours in a week. Under the old rules, you had to earn less than $23,660 to be certain you were entitled to overtime pay.
Because of the changes, the White House estimates that 4.2 million additional workers will be covered by the overtime rules, making this a monumental labor reform. Where it works as planned, salaried employees will be taking home bigger paychecks, or working more reasonable hours as their employers try to avoid the time-and-a-half overtime premium.
Business groups are in a tizzy over this reform, since it’s going to raise labor costs on employers. Along with Republicans in Congress, they have pressed hard to have the reforms watered down, delayed or scrapped altogether.
And with a Republican in the White House and the GOP controlling both chambers of Congress, they may finally get their wish. A federal court ruling out of Texas last week has already put the changes in limbo.
One of the industries seriously affected by the reform is the one where Trump made much of his fortune ― hotels and hospitality. The industry is chock-full of workers in the reform’s sweet spot: salaried employees who make decent but not great money and who frequently have to work long weeks. Think assistant managers, front-desk agents, sous-chefs, sommeliers and the like.
To understand the conflict in clear terms, imagine an assistant groundskeeper (who has a bachelor’s degree in golf course management) at a golf course that may or may not be owned by the Trump Organization. Our hypothetical employee works on salary, earning something in the low $40,000s. He likes his job, but it’s brutal in the busy winter season (we’re in Florida), and he’s often putting in 60-hour weeks to keep the course in shape. Under the old rules, he doesn’t get paid any overtime for those extra 20 hours he works in the high season ― all he takes home is his base salary.
But under the new rules, he’d be eligible for time-and-a-half pay on those additional hours. That leaves his employer with a few options. They can start paying our groundskeeper overtime pay. They can bump up his salary so that it’s above the new threshold of $47,476, thereby making him exempt from the rules. Or they can hire an additional assistant and give her those extra 20 hours, thereby avoiding the time-and-a-half pay on our original worker. But any way they do it, the employer is going to have to pay some amount of money they weren’t paying before.
Many of Trump’s conflicts of interest are plain as day ― regardless of whether he hands off control of his business to his children, or puts his assets in a blind trust. The Trumps have leased government real estate for their new D.C. hotel, putting a President Trump in possible violation of the lease terms. Trump has vouched for his Turkish business partner in a call with the Turkish president. And three of Trump’s children, including Ivanka, an apparel maker, are on his transition team and sitting in on meetings with foreign leaders with whom they might do business at some point.
But as the overtime rule shows, potential conflicts may arise anywhere Trump is helping to set employment policy. He will be filling positions at agencies tasked with policing Trump workplaces, including the Labor Department (which has investigated the Trumps over wage theft allegations) and the National Labor Relations Board (whose general counsel has accused the Trumps of union-busting). Mitt Romney may have gotten his counsel from guys who sign paychecks. But Trump is the guy who signs paychecks.
And there are a few different ways Trump and Republicans could bottle up or undo Obama’s overtime reforms, if the president-elect wants to.
Trump could write a new rule that weakens the reforms or reverses them. Though very much within his power, that tactic would be time-consuming, given the rule-making process. Republicans could send him a spending bill with riders that block funding for enforcing the rule, which would help neuter it. Or they could send Trump a bill to sign that outright kills the rule, if they can overcome a Democratic filibuster.
Each of these routes comes with a political challenge: Trump would have to tell millions of workers that they won’t be getting overtime pay after all, despite his vows to bring back good jobs and raise wages. Democrats held a press conference at the Capitol on Thursday to press this point. As Sen. Patty Murray (D-Wash.) put it, “He made promise after promise on the campaign trail about helping workers, and he’s going to have to decide whether he’s going to follow through.”
In any case, the ball will very much be in Trump’s court, so long as the rule isn’t blocked altogether by litigation. Perhaps President Trump will set aside his own interests and decide what he thinks is best for the country, whether that’s killing the reforms or preserving them. Just don’t expect him to forget that his family owns a bunch of hotels.
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