ECONOMY
Overtime Pay Could Extend To Millions Of Salaried Workers Earning Less Than $55,000 Under Proposed New Rule
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The U.S. Department of Labor on Wednesday announced its proposal for a new rule that would see millions of salaried workers gain overtime protections.
The proposed rule would raise the salary cutoff for overtime pay eligibility to $55,000, up from the current cap of $35,568. While hourly workers are required to receive time-and-a-half overtime pay when they work more than 40 hours, low-paid salaried workers are not.
“For over 80 years, a cornerstone of workers’ rights in this country is the right to a 40-hour workweek, the promise that you get to go home after 40 hours or you get higher pay for each extra hour that you spend laboring away from your loved ones,” Acting Secretary Julie Su said in a statement.
“I’ve heard from workers again and again about working long hours, for no extra pay, all while earning low salaries that don’t come anywhere close to compensating them for their sacrifices. Today, the Biden-Harris administration is proposing a rule that would help restore workers’ economic security by giving millions more salaried workers the right to overtime protections if they earn less than $55,000 a year,” Su said.
“For too long, many low-paid salaried workers have been denied overtime pay, even though they often work long hours and perform much of the same work as their hourly counterparts,” said Principal Deputy Wage and Hour Division Administrator Jessica Looman.
Some experts say that employers are inflating salaried employees’ titles even thought they do the same work as hourly employees, in order to skirt overtime rules.
“Managers continue to suffer the dreaded ‘management crunch’, in which they are working abnormal hours just to keep up with the demands of their bosses as well as the employees they lead. It is time that they receive time-and-a-half pay and then some,” said employee and labor relations consultant Jason Greer, co-author of “Bias, Racism and the Brain.”
“Hopefully this will cause employers to move away from over inflating workers’ job titles in order to avoid paying them in full for overtime work,” Greer said.
“This is going to be great for a lot of people who legitimately work overtime, but don’t reap the benefits of overtime pay because of the way the system works today,” said Ted Jenkin, founder and CEO of Atlanta-based oXYGen Financial.
Jenkin said the rule may be “especially beneficial for those that work in a small business,” where the rules may not be followed as closely as they should be.
“However, consumers need to remember that when the cost of labor goes up, so do the prices that you pay, because Fortune 500 companies have an insatiable appetite for profit,” Jenkin said.
According to the agency, the rule change would affect some 3.6 million workers. The proposal is subject to a 60-day public comment period, and, if approved, would not come into force for months.
TMX contributed to this article.
