Attorney General Becerra Joins Coalition Opposing Federal Proposal Threatening Overtime Pay for Low-Wage Workers

SACRAMENTO – California Attorney General Xavier Becerra today joined a coalition of 18 attorneys general in filing a comment letter opposing a proposed rule by the U.S. Department of Labor (DOL) that threatens to significantly reduce overtime pay for certain low-wage workers. 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 urges DOL to rescind the proposal and highlights California’s strong labor laws protecting against such pay methods.

“Employers should pay people fairly for the hours they work,” said Attorney General Becerra. “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. However, this method relies on the flawed premise that low-wage workers and other employees have the bargaining power to negotiate a fair minimum salary. In reality, it reduces a worker’s regular hourly rate with each hour worked and is contrary to state law restrictions regarding daily overtime requirements. The fluctuating workweek overtime computation method is unlawful in California.

The proposed rule would exacerbate inequities in the fluctuating workweek system by expanding the types of pay that are used to calculate weekly fixed salaries. Under the rule, employers would now be able to include compensation such as shift differential pay, premium pay, or incentive pay. Currently, people receiving such premium pay cannot be subject to the fluctuating workweek system. As a result of the proposal, workers could see reductions in their overall compensation. Moreover, DOL’s proposal could incentivize employers to require employees to work longer hours for less money.

Attorney General Becerra is committed to protecting the rights of workers throughout the state and across the country. In November, the Attorney General called on the Federal Trade Commission to protect workers by banning non-compete agreements in employment contracts nationwide. The California Department of Justice also joined an effort to obtain more information on arbitration policies that can result in companies failing to address worker complaints. In September, Attorney General Becerra urged the U.S. Department of Labor to rescind a proposal undermining civil rights protections that prevent federal contractors from discriminating against employees. Earlier this year, the California Department of Justice, as part of a multistate effort, entered into agreements with major fast food companies operating around the country, prohibiting them from including provisions in contracts that make it more difficult for employees to seek better pay and benefits at competing franchises. Last year, Attorney General Becerra co-led a coalition of attorneys general in opposition to a proposed rule that threatened to force workers to share their tips with their employers.

In submitting the comment letter, Attorney General Becerra joins 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.

A copy of the comment letter is available here.