In May, the Department of Labor proposed a new rule that would update how overtime pay works. If the rule becomes permanent, it would be a great thing for hardworking families across the country.
Overtime is simple, right? If you work more than 40 hours a week, you get time-and-a-half for those extra hours. Employers are incentivized not to overwork their employees, employees can pick up a few hours if they need to make some extra money, and things work out for everyone. What could go wrong?
But as it turns out, there’s a large group of employees who aren’t entitled to overtime pay. Employees with annual salaries over a certain threshold, who work in managerial or professional jobs, don’t have to be paid for their extra hours. In theory, this is fine—managers and other professionals might work more hours, but if they get paid enough, it all evens out.
Unfortunately, that’s not quite the case.
Why? First of all, the salary threshold for employees who are entitled to overtime has only been raised once since 1975.
That one measly increase has left the salary threshold at just $23,660 a year. And because the increase isn’t tacked to inflation, $23,660 a year leaves a family of four below the poverty line.
But what about the second part of the requirement—that employees have professional or managerial duties if they’re not paid overtime? It turns out that rather than take this requirement seriously, many employers just tack on the title of “Manager” to an employee’s job description and assign them one or two tasks that could be considered manager’s jobs.
And it gets worse: because these employees aren’t automatically entitled to overtime compensation, employers can schedule them for dozens of extra hours without paying them extra.
Employees can be required to work up to 60 or 70 hours a week without extra pay, while employers pocket the profits.
That’s why the new overtime rule is so important. It would raise the salary threshold for overtime exemption to $50,440 a year.
The new rule has been estimated to benefit up to 13.5 million workers. That’s great news for those families, and great news for our economy.
So what can you do to support the proposed rule?
The Department of Labor is currently collecting public comments on the rule. Tell the DOL to give workers the pay they deserve. It’s time to say goodbye to outdated overtime rules.