Whitmer seeks to expand overtime rights for 200,000 workers; chamber calls it 'reckless'
Detroit — Michigan Gov. Gretchen Whitmer wants to expand by at least 200,000 the number of Michigan salaried workers who are eligible for overtime pay, a move that a key business group called "reckless."
On Thursday, the Democratic governor ordered the state Department of Labor and Economic Opportunity to write a rule that would go beyond Trump administration rules set to start in January that would expand overtime eligibility to employees earning up to $35,568 a year. The workers would earn 1.5 times pay for any time worked over 40 hours a week.
Current federal law exempts salaried workers earning more than $23,660 a year, or $455 per week, from getting overtime. Even with the federal change, less than one in six Michiganians would benefit, according to the Whitmer administration.
The governor and other state officials said by the time the rule would take effect after public comment and feedback, it could take up to a year to be implemented.
"It is unclear if Governor Whitmer has statutory authority to unilaterally impose this type of very expensive and highly counterproductive state overtime mandate on Michigan’s job providers," Michigan Chamber of Commerce Presient and CEO Rich Studley tweeted Thursday afternoon.
Families, Whitmer said at a news conference, "should be able to afford the necessities of life."
"When people have more money in their pockets and more money to spend ... that's how we grow our economy," the governor said. "That's we protect people who are truly working to try and get ahead."
Five other states — Pennsylvania, California, New York, Massachusetts and Washington — have taken similar action regarding overtime, the governor said.
"It's time for Michigan to join them. It's time for us to lead," Whitmer said at a news conference at a the Peacock Room, a women's apparel store in the Fisher Building in Detroit's New Center area.
The Whitmer administration plans to create a rule that starts with $51,000 as the threshold for a worker to be eligible for overtime pay — what former President Barack Obama proposed but was thwarted by the courts. It would help at least 200,000 Michigan workers who otherwise wouldn't be eligible for overtime pay under federal rules, according to the administration's estimate.
The Michigan Chamber of Commerce plans to oppose the developing rule because its officials argue the rule would hurt "the economy and very workers it is hoping to help."
"The governor’s announcement comes just one month after the federal government unveiled its final rule to extend overtime pay eligibility to an estimated 1.3 million workers by lifting the annual salary threshold below which workers qualify for overtime wages to $35,568 from the current level of roughly $23,600," said Wendy Block, vice presidency of business advocacy for the Michigan chamber.
"It's unfortunate that Gov. Whitmer has decided to supersize the federal overtime changes, potentially taking Michigan’s salary threshold to $51,000 or higher. We believe this unilateral action by the governor is reckless because it would take the salary threshold too high, too fast."
Workers face "economic headwinds even in a growing economy" with income growth lagging behind the national average in Michigan, said Jeff Donofrio, director of the state's Department of Labor and Economic Opportunity.
The Trump administration "just doesn't go far enough" with overtime protections "and too many Michigan families are going to be left behind," Donofrio said.
"Expanding overtime protections are essential because those unpaid hours come at the expense of paid work or family care responsibilities," he said. "Think of the working mother who is not paid for her overtime but yet has to pay for additional hours of child care."
Other states run by Democrats are raising the overtime pay threshold. They include Pennsylvania, which is set to increase the bar to $45,500 by 2022; California, $62,400 by 2022; and Washington State, $79,872 by 2026.
The U.S. Chamber of Commerce and a coalition of other business groups backed 21 states that sued in federal court to stop the Obama rule.
A federal judge in Texas ruled in 2017 that the proposed federal salary mark of $47,000 was set so high it could have included management workers who are supposed to be exempt from overtime. He also said the rule emphasized salary level too much and ignored job duties in setting overtime eligibility.
Under Republican former Attorney General Bill Schuette, Michigan was among the 21 states that successfully sued to stop the Obama overtime rule.