Imagine getting a pay raise, only to be told weeks later: Sorry, we're taking it back.
That's what's happening to 306 employees at The Ohio State University now that a federal court has struck down the Biden administration's overtime rule.
Finalized in April, the rule would have made some 4.3 million salaried workers nationwide newly eligible to earn 1.5 times their regular pay when they work more than 40 hours a week.
"One of the basic principles of the American workplace is that a hard day's work deserves a fair day's pay," wrote Jessica Looman, head of the Labor Department's Wage and Hour Division, in a blog post explaining the rule.
The rule began to be phased in on July 1, when salaried workers earning less than $43,888 a year became automatically eligible to earn overtime, a hefty increase from the previous threshold of $35,568.
The more significant jump would have come on Jan. 1, 2025, when that threshold was set to rise to $58,656, with an automatic update every three years based on current wage data.
Employers across the country, it seemed, had two choices: Begin paying eligible workers overtime, or raise their pay above the new threshold.
Ohio State, with a workforce of more than 50,000, decided to do some of both: It converted some employees from "exempt" to "non-exempt" status, so they'd be eligible to earn overtime. And it gave raises to others across the institution, including people working in academia, athletics, the university's medical center and elsewhere.
For the 306 people who would have become overtime-eligible on Jan. 1, those raises came early — on Nov. 1.
But they were short-lived.
A court ruling leads to a take back
On Nov. 15, U.S. District Judge Sean D. Jordan of the Eastern District of Texas ruled that the Labor Department had exceeded its authority in issuing the overtime rule, finding fault with the new salary threshold, which he said was too high, and with the automatic updating.
Given the millions of workers and the large variety of employers who would be impacted by the rule, he wrote that it would be impractical, if not impossible to tailor it in a way that would be acceptable. So he tossed the rule in its entirety.
A week later, Ohio State delivered the bad news. In emails sent late on a Friday afternoon, the 306 employees who had just gotten raises were informed that "as a result of the reversal in the law, you will no longer receive an increase in your base pay."
As a consolation, they were told they could keep the raises through the end of this year.
"A punch in the gut"
One of those employees, an administrative staffer who asked not to be identified by name out of fear of retaliation, described the move as "a punch in the gut."
The employee, who oversees 130 student workers, had gotten a salary bump from $55,100 to $58,700, just above the new salary threshold.
By rescinding the raise, this employee said, Ohio State had sent a discouraging message: "We don't value you. What you're doing is not worth the increase."
According to the university, the raises for the 306 employees would have cost $2,047,000, a tiny fraction of its $10 billion budget.
"We know this is disappointing," university officials wrote in the emails to employees. "Given the reversal in the law, we will continue to focus on impact and decisions that consider all of our staff and the university."
Echoes of 2016
The Labor Department has appealed the federal court ruling, but it's unlikely to lead to a restoration of any part of the overtime rule before Jan. 20, when President-elect Donald Trump takes office with what's expected to be a very different agenda.
What's unfolding now is eerily reminiscent of what happened eight years ago, at the tail end of the Obama administration.
The Labor Department, under President Barack Obama, had also attempted to expand overtime protections to some 4 million workers, by raising the salary threshold from $23,660, set in 2004, to $47,476. A federal judge blocked the rule a week before it was to take effect on Dec. 1, 2016.
Recognizing that the 2004 threshold was outdated, the Trump administration in 2019 issued its own overtime rule, setting a new salary threshold of $35,568, a level that worker advocates called "inappropriately low."
With the Biden rule struck down in November, that threshold is back in effect, giving many employers a sense of relief.
One nonprofit's case against overtime pay
Up until last month, Carrie Lukas, president of Independent Women's Forum, a conservative nonprofit, had been weighing her choices.
Among her staff of 35 are six fresh college graduates, each earning well below the new overtime threshold. Raising their salaries to just above the threshold would have cost the organization about $60,000.
"That's like somebody's full salary," says Lukas. "We would have had to get rid of one of those younger girls."
But without a raise, they would have been eligible to earn overtime pay starting Jan. 1. For Lukas, that was also a nonstarter given the nature of her organization's work.
This past summer, Independent Women's Forum ran the Take Back Title IX bus tour. It featured celebrity athletes, including swimmer Riley Gaines and tennis veteran Martina Navratilova, campaigning against the inclusion of transgender athletes in women's sports.
"Thirty states in 30 days and all these rallies everywhere," says Lukas. "The hours were nuts."
Still, Lukas says, the assignment thrilled many of her employees, particularly the younger ones without family responsibilities at home.
One staffer in particular hit it out of the park, Lukas says, working the length of the bus tour. At the end, she was rewarded with a bonus.
"It was such an experience. But all that discretion, all of that opportunity to knock my socks off and make me think you are capable of much more than I thought – all of that would have been gone," had she been required to pay this staffer overtime, Lukas says.
"The solution absolutely from an HR perspective would be: You guys don't get to go."
For many workers, overtime brings stress
Of course, for most salaried workers, overtime doesn't mean getting to travel the country with celebrities, working on issues you're passionate about.
In public comments submitted during the rulemaking period, salaried workers described the physical and mental strain of working 50 to 60 hours a week, often missing family events because of unpredictable schedules, without any extra pay.
"I should not have to make those sacrifices to pay my bills. If I do need to miss something that's 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 annually 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 salaried workers were eligible to earn overtime pay. But over the decades, as earnings increased and the regulation failed to keep pace, the share of covered workers fell sharply — to 7% by 2016.
The Obama administration's overtime rule would have covered about a third of full-time salaried employees. Under the Trump rule that replaced it, millions fewer have benefited.
While Trump campaigned for a second term on a promise of prosperity for workers, few expect him to defend the Biden rule. It's unclear whether, like last time, he might seek an update of his own. Trump's team did not offer a response when NPR asked about his overtime policy during the campaign.
Project 2025, the conservative blueprint for a second Trump administration, proposes changes to overtime protections that would move in the opposite direction, dramatically reducing the number of workers earning overtime pay.
One proposal would let employers calculate overtime based on a longer stretch of time, so workers would earn 1.5 times their regular pay only after exceeding 80 hours over a two-week period. Another would give employers and workers the option of comp time in lieu of overtime pay.
Trump's transition team has not responded to questions about whether he supports those ideas.
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