CA Joins Coalition Opposing Federal Threat To Overtime Pay

SACRAMENTO – California Attorney General Xavier Becerra last week joined a coalition of attorneys general from 18 states in filing a comment letter opposing a proposed rule by the U.S. Department of Labor (DOL). The rule threatens to significantly reduce overtime pay for certain low-wage workers by paying them a set wage irrespective of how many hours they actually worked.

Under the proposal, DOL is attempting to allow the expanded use of fluctuating workweek salaries, which result in less pay for every additional hour worked and drastic reductions in pay for overtime hours. In the comment letter, Attorney General Becerra urged DOL to rescind the proposal and highlighted pro-labor laws in states such as California that protect against such pay methods.

“Employers should pay people fairly for the hours they work,” said Attorney General Becerra via a released statement. “The Trump Administration continues to make it harder for Americans to earn a fair day’s wage for a fair day’s work. In California, we’re protecting workers from attacks on their overtime pay and we know that workers across the country deserve these same protections. Today, we are calling on the federal government to join us in those efforts.”

DOL estimates that nearly 700,000 workers are currently paid under the fluctuating workweek method nationwide. The method was initially developed to permit certain non-exempt or non-professional employees who work irregular hours to negotiate a consistent minimum salary with their employers. Under a fluctuating workweek system, non-exempt employees would be guaranteed the same salary no matter how many hours they work in a week.

According to the attorneys general however, this method relies on a flawed premise, namely that low-wage workers and other employees have the bargaining power to negotiate a fair minimum salary. In reality, they argue, it reduces a worker’s regular hourly rate with each hour worked and is contrary to state law restrictions regarding daily overtime requirements. For these reasons the fluctuating workweek overtime computation method is unlawful in California.

As a result of the proposal, the attorneys general believe that workers will not only see potential reductions in their overall compensation, but the proposal would incentivize employers to require employees to work longer hours for less money.

Attorney General Becerra joined the attorneys general of Illinois, Pennsylvania, Colorado, Connecticut, Delaware, Hawaii, Maryland, Massachusetts, Minnesota, Nevada, New Mexico, New York, North Carolina, Oregon, Vermont, Washington, and the District of Columbia in submitting the letter.

A copy of the comment letter can be viewed here: https://oag.ca.gov/system/files/attachments/press-docs/Notice%20of%20Proposed%20Rulemaking_Fluctuating%20Workweek%20Method%20of%20Computing%20Overtime.pdf