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Eliminating overtime pay?
On page 592 of the Madate for Leadership, the document lays out recommendations for changes to overtime pay regulations in the United States. The Heritage Foundation’s Project 2025 playbook proposes an “overtime pay threshold” that is not an abolishment of overtime pay.
- Overtime threshold: It suggests keeping an overtime pay limit that works for businesses in cheaper areas of the country, such as the southeastern United States. The document proposes considering an automatic update to the thresholds every five years using the Personal Consumption Expenditures (PCE) as an inflation adjustment.
- Regular rate calculation: The section recommends that Congress clarify that the “regular rate” for overtime pay should be based on salary paid, not including extra benefits. This, the authors say, would let companies offer more benefits without worrying about higher overtime costs.
- Overtime calculation period: It proposes overtime to be calculated over two or four weeks instead of just one week.
- Fringe benefits consideration: The document expresses concern that current overtime rules discourage employers from offering certain fringe benefits (like education reimbursement, child care, or free meals) because these benefits’ value might be included in the “regular rate” used to calculate overtime pay.
- Balance of protections: It aims to set a limit that guarantees lower-income workers have overtime pay protections while not discouraging employers from offering valuable fringe benefits.
The proposed changes would give employers more flexibility in managing overtime pay and benefits, potentially reducing their costs but also potentially impacting some workers’ overtime earnings.
Critics say Project 2025 erodes overtime pay
Liberal advocacy organization Democracy Forward created “The People’s Guide to Project 2025,” which says “4.3 million people could lose overtime protections” if the governing agenda is enacted.
Former Secretary of Labor Robert Reich, in an Instagram post, wrote that during the Trump presidency, the “Department of Labor set the overtime pay threshold for salaried workers at a disgraceful $35,500 per year — meaning any workers earning more than that were not eligible for overtime pay even if they worked more than 40 hours. It’s estimated that the move eliminated overtime for about 8 million workers.”
The professor and pundit said that the Biden administration “has since raised the threshold, meaning more salaried workers will qualify for overtime.”
The current overtime rules laid out in the Fair Labor Standards Act for covered nonexempt employees include:
- Must receive 1.5 times regular pay for hours worked over 40 per week.
- No limit on weekly hours for workers 16 and older.
- No required overtime for weekends, holidays or rest days unless over 40 hours.
What does Project 2025 propose?
A main component of Project 2025 is the firing of as many as 50,000 federal workers, who conservative groups say will get in the way of their agenda.
Under Project 2025, agencies such as the U.S. Department of Education would be “eliminated,” and others, like the Federal Trade Commission, Federal Communications Commission, and Justice Department, would be put under the president’s control.
The proposal also calls for for an overhaul of the U.S. tax system that would include fewer tax brackets, the elimination of most deductions and a lower corporate tax rate.
The political back-and-forth
The Democratic National Committee has rolled out media campaigns linking former President Donald Trump to the Heritage Foundation’s governing agenda.
Many former Trump administration officials, including Ben Carson and Ken Cuccinelli, were contributors to the plan.
Biden’s campaign and Democrats have increasingly worked to hit Trump with Project 2025 as Biden has grappled with a negative news cycle and growing calls from Democrats to step down from his campaign.
Trump has distanced himself from the agenda, saying any attempt to tie him to it is “pure disinformation.”
But he’s also spoken warmly about it, and the connection was further cemented by Trump’s selection of Ohio Sen. JD Vance as his running mate. Heritage President Kevin Roberts said he’s “good friends” with Vance and that the Heritage Foundation had been privately rooting for him to be the VP pick.
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