Behind a New Worker Overtime Rule: Hard-Hitting Policy Wonks and Generous Funders

Yesterday, we wrote about philanthropy's major role in the Obama administration's bid to regulate greenhouse gases from coal-fired power plants through executive action. Well, here's a similar story: As the administration unveils a tougher rule for overtime pay this week, foundations can justly claim some of the credit.

This has been a great month for the president, as many commentators have noted, but it's also been a good one for progressive funders who've seen several longstanding investments pay off.

About that overtime rule: Right now, if you make over $23,660, you're not eligible for overtime pay when you put in more than 40 hours a week. The administration aims to change that, raising the threshold to $50,440.

If the new rule stands, it will be a huge victory for workers, and one long sought by labor unions and progressive reformers. As an aside, the change could have big implications for nonprofits, where idealistic worker bees make modest salaries and put in ample overtime.

So who can claim credit for this major step? Well, apart from labor unions, the biggest share of credit goes to the National Employment Law Project (NELP) and its top funder, the Ford Foundation.

NELP has been pushing for big policy changes on employment for a long time, and describes its mission as fighting "policies to create good jobs, expand access to work, and strengthen protections and support for low-wage workers and the unemployed."

NELP has been on fire in recent years, publishing a string of hard-hitting reports on the sorry state of American workers—along with the many failings of the antiquated regulatory regime that's supposed to protect worker rights. NELP has spotlighted the need for stronger rules, as well as the systemic flouting of those rules that do exist to help workers. One of its major studies, "Broken Laws, Unprotected Workers," found that:

Workplace violations are severe and widespread in the low-wage labor markets... All workers—regardless of legal status, race, gender and nativity—are at risk of workplace violations, though some groups are more vulnerable than others.

That report received wide media attention, as did this report on how federal neglect of state unemployment systems left many states scrambling during the Great Recession, with too many applications and not enough staff to handle the work.

NELP hasn't only done cutting edge research, it's also played a key role in organizing. In 2009, for example, it convened the Just Pay Working Group, a broad array of advocates, thinkers, and policymakers working to improve how the government enforces labor laws.

Overtime pay is one place where NELP has long seen the need for updated rules and more enforcement. It says that the "erosion of overtime pay is a key factor in the deterioration of middle-class wages and living standards," with the existing salary threshold badly outdated. In a report last year, NELP chronicled the weaknesses of overtime rules, how it was hurting middle class workers, and why reform was urgently needed. It said that if the overtime salary threshold had kept pace with inflation, it would stand at $51,168.

The fact that the Obama administration is now raising the threshold to $50,440 says something about NELP's influence these days.

NELP gets support from a number of foundations, but its biggest backer is the Ford Foundation. Ford has supported NELP since at least 2006, with grants that have grown in size dramatically in less than a decade.

In 2009, NELP got a $2 million grant from Ford. In 2010, it received nearly $3 million and in 2011 it got over $5 million. That's a lot of support for a group that used to be pretty modest in size, and the money kept flowing: Ford gave NELP $2.65 million in 2013 and $2.2 million in 2014. That's nearly $15 million overall in Ford grants to NELP in the past six years.

Ford's support for NELP reminds us of its generous backing of another policy group, Family Values @ Work, which advocates for better workplace leave policies, and which has received at least $11 million in grants from Ford since 2009. Like NELP, Family Values @ Work has achieved significant momentum in recent years, and the folks at Ford can rightly pat themselves on the back for betting big on two highly capable organizations that have moved the needle on labor policy.

Other supporters (grants of over $100,000) for NELP over the past decade include Rockefeller, Mott, Joyce, the Public Welfare Foundation, Open Society, Annie E. Casey, and Rosenberg.

Of course, NELP isn't the only group in the fight to update labor laws and ensure they are properly enforced. The Economic Policy Institute is another leader in the overtime fight.

It's worth highlighting the role of David Weil, the Administrator of the Wage and Hour Division at the Department of Labor and the administration's point person on labor regulations. Weil came to this post recently from Boston University, where he did influential, ground-breaking research on labor policy—with support from a number of foundations.

Among the funders of Weil's work is the Russell Sage Foundation, which has invested heavily in researching labor markets and low-wage work in particular, as we recently reported. It's another funder that can claim credit as this tough critique of unfair labor conditions increasingly gains traction in public policy debates.