During his first term, Trump cut overtime pay for millions of people. A second term would be much worse

October 22, 2024

During his first term, Trump kept millions of new people from getting overtime. A second term would be much worse

As both a president and a businessman, Donald Trump has a terrible record on paying workers overtime.

BY Bryce Covert and Capital and Main

Though former President Donald Trump presents himself as a champion of the working class with promises to cut taxes on overtime, his record as both a businessman and president paints a different picture. Trump and his businesses have faced multiple accusations of failing to pay workers overtime they were owed. Once he was in office, Trump’s Department of Labor issued a rule that reduced by millions the number of workers who would have become eligible for overtime pay under an Obama era rule.

Project 2025, a Heritage Foundation blueprint for a potential second Trump term that the former president has alternately embraced and distanced himself from, goes even further. The 900-page document outlines plans for a sweeping overhaul of overtime protections that would give employers ways to avoid paying overtime to workers who have long qualified for time-and-a-half pay after 40 hours.

When asked for comment on this story, including about Trump’s overtime proposals and the lawsuits against his businesses, a Trump campaign spokesperson replied only, “Project 2025 has nothing to do with the campaign.” A spokesperson for the Heritage Foundation previously declined to comment on policy specifics when asked by Capital & Main, and added, “Project 2025 does not speak for President Trump or his campaign.” At least 140 people who worked for Trump were involved in crafting Project 2025, however, and in 2022 Trump said the Heritage Foundation was “going to lay the groundwork and detail plans for exactly what our movement will do.”

One worker who stands to suffer the financial consequences if Project 2025’s proposals become reality is Theresa Kinard. After working for 15 years at a Waffle House in Marietta, Georgia, her base pay is still $19 an hour. “It’s just not enough,” she noted. Even though her adult daughter also works at Waffle House, they have to live together “in order for both of us to survive,” she said. 

Still, Kinard’s pay stretches a bit further thanks to overtime. She’s scheduled to work 40 hours a week, and without overtime, she would earn an annual income of $39,520. But her restaurant is so short-staffed that she is always asked to work longer, earning her time-and-a-half pay for the extra shifts she takes on each week. At $28.50 an hour, the additional 10 to 15 overtime hours add up to about $400 a week.

“Overtime, it helps a lot,” she said. “Without it, a lot of things wouldn’t get taken care of.” She would be short on paying each month’s bills, such as her car note or car insurance, or she wouldn’t be able to afford all of her groceries. Losing access to overtime pay could “possibly mean eviction,” she said, or it “could possibly mean me losing my car.” 

It “would hinder us really bad,” she said.

It’s a possibility she and millions of other Americans may face if a second Trump term mirrors the first and if he adopts the recommendations on overtime outlined in Chapter 18 of the Project 2025 blueprint.

Project 2025 calls for undoing the Biden administration’s overtime pay expansions and also proposes ways for employers to avoid paying it to those who do qualify, eroding its status as a bedrock labor protection.

In each of Project 2025’s overtime provisions, “workers do not get any additional benefits. It is only employers who get additional benefits,” said Heidi Shierholz, an economist with Economic Policy Institute Action, a nonpartisan advocacy group focused on economic issues. Employers are granted various ways to avoid paying extra for extra work while benefiting from a worker’s labor. “It is an extremely anti-overtime agenda,” she said.

Overtime is “just an absolutely core labor standard,” said Shierholz. If an employer decides to ask employees to “add chaos to their lives” by putting in unusually long hours, she noted, overtime ensures “workers don’t work those hours for free.” It also puts a check on long hours—other employers will decide they’d rather not pay extra and cap employees’ hours at 40 a week. When the Fair Labor Standards Act was passed in 1938, enshrining the right to overtime pay as well as the minimum wage, it helped standardize the workweek at eight hours a day, five days a week.

While in office, Trump refused to support an Obama-era rule that would have expanded overtime pay to an additional 4 million workers. Instead, Trump issued his own rule that significantly reduced the number of people eligible for overtime, extending protections to only 1.3 million additional workers.  

After Trump left office, President Joe Biden finalized his own overtime rule, which this summer adjusted Trump’s $35,568 salary threshold for overtime pay eligibility to account for inflation. Biden’s rule will again raise the salary threshold from $43,888 to $58,656 by January 2025. Additionally, it mandates that the threshold be updated every three years to keep pace with inflation. Once fully implemented, 4.3 million more workers will be eligible for overtime pay when they work more than 40 hours a week.

Project 2025 calls for reversing course yet again, saying the next Republican president should eliminate Biden’s overtime rule and return to the Trump administration version, with updates to account for inflation only every five years. Doing that would make Kinard and other workers like her who qualify under Biden’s actions no longer eligible for extra pay.

The document goes further, calling on Congress to let employers calculate overtime pay over two or four weeks instead of one. While the document says this would give workers “greater flexibility,” in practice, workers would end up earning less. An employee who works 45 hours one week and 35 the next would earn overtime pay for those extra five hours in the first week under current law, but if averaged over two wouldn’t get any extra pay at all.

“Employers would be able to game that like crazy,” Shierholz said. They could ask workers to put in incredibly long hours one week “and then smooth out their hours over the following week or weeks so that they just would never get paid overtime.”

Those two provisions together—rolling back Biden’s rule and allowing employers to calculate overtime pay over more weeks—would strip overtime protection from 8 million workers, according to an analysis by Economic Policy Institute Action, which Shierholz characterized as a “super conservative estimate.”

Project 2025 contains other ideas that would similarly erode overtime pay and protections. It calls for letting workers trade their overtime pay for paid time off. While on its surface, the proposal seems to offer workers paid time off, which many Americans lack, it’s instead about allowing workers to “swap pay for time,” said Lynn Rhinehart, a senior fellow at the Economic Policy Institute. “It’s deceitful.”

Employers can already offer to let workers accrue paid leave when they put in extra hours under current law. This provision instead “gives workers no additional benefits,” Shierholz said. “It only gives employers extra rights.” Employers would have the power to dictate when workers would give up extra pay for leave; workers would also have to ask employers to use the comp time they’d saved up, and there’s no requirement that they be allowed to when they need it. 

The conservative blueprint says Congress should pass legislation denying overtime pay for people who work remotely unless they log 10 hours every day—meaning someone who worked nine hours every day, five days a week, would not receive any extra pay for those additional five hours worked beyond 40. 

Project 2025 also calls for allowing unions to negotiate over existing workplace laws—including the minimum wage and overtime—instead of treating them as floors. That would force unions to negotiate over what have long been considered minimum workplace standards.

The provision is a “doozy,” Shierholz said, because it “just robs power from workers” while giving employers “a new bargaining chip.” Finally, it says states should be given waivers from federal labor laws to “encourage experimentation.” One of those would likely be the Fair Labor Standards Act, allowing states to grant businesses exceptions from overtime pay and the minimum wage, Shierholz said.

Recently, while on the campaign trail, Trump floated a proposal to shield overtime pay from taxation. Analyses by the Budget Lab at Yale University and the Tax Foundation have found that, if such legislation were to be introduced and passed by Congress, it would be extremely expensive, costing hundreds of billions of dollars in lost tax revenue over a decade. Those estimates are very conservative, however, because they don’t account for how highly paid workers could game the system by converting their pay to a low hourly rate and reaping the tax-free benefits of all overtime pay above that.

“I think it is very, very unserious,” Shierholz said. “It’s super cynical. He has undermined overtime and workers left and right.”

Trump has been accused personally of failing to pay workers. His companies were cited for 24 violations of overtime or minimum wage protections between 2005 and 2016, according to Department of Labor data analyzed by USA Today. A lawsuit in the early 1980s alleged his real estate company paid Polish immigrant contractors only $4 to $5 per hour without overtime pay, even though they were working 12 hours a day, seven days a week. Some workers said they were never paid at all. The lawsuit ended in a sealed settlement.

Guy Dorcinvil, a dishwasher at Mar-a-Lago, filed a lawsuit in 2007 alleging he hadn’t been paid overtime he was due over a period of three years, ending in a $7,500 settlement the next year. In 2016, Trump Miami Resort Management settled with 48 servers for failure to pay overtime, paying an average of $800 per worker. The lawsuit alleged that some workers put in 20-hour days over a 10-day event. In response to reporting about the last two lawsuits, Trump insisted that all contractors and employees are paid fairly and that the complaints represent a small fraction of his business dealings.

Taken together, Trump’s past business practices, his presidency, and the Project 2025 agenda indicate a focus on eroding overtime protection. “The ability to get overtime is security and stability,” noted Janelle Jones, vice president of policy and advocacy at the Washington Center for Equitable Growth. Project 2025 attacks workers’ “paychecks [and] their economic safety and security.”


This piece was originally published by Capital & Main, which reports from California on economic, political, and social issues.


ABOUT THE AUTHOR

Bryce Covert is an independent journalist writing about the economy. She is a Reporter in Residence at the Omidyar Network and a contributing writer at The Nation. 


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