More than a million U.S. workers would become eligible for overtime pay under a new rule proposed this month by the U.S. Department of Labor.
Currently, employees must earn less than $455 a week — or $23,660 a year — to qualify for time-and-a-half pay if they work more than 40 hours in a week. The DOL wants to raise that threshold to $679 a week, or $35,308 a year, including a larger swath of the population in the requirements for overtime pay.
The public has about two months to comment on the rule before it is finalized.
Employers could respond in several ways. Obviously, they could pay overtime for more of their employees. Alternatively, they may find it more beneficial to bump up salaries so employees are above the earnings threshold, or they may limit hours. But however employers respond, be vigilant — make sure you’re receiving the pay you’ve earned.
The overtime pay threshold hasn’t been updated since 2004. The Obama administration had wanted to push it past $47,000, but a judge put the plan on hold. Since then, the Labor Department had been gathering public input about the topic, including about whether the overtime threshold should be reviewed periodically.
Overtime protections — with slightly different rules — would remain in place for police officers, fire fighters, paramedics, nurses and laborers, including: non-management production-line employees and non-management employees in maintenance, construction and similar occupations such as carpenters, electricians, mechanics, plumbers, iron workers, craftsmen, operating engineers, longshoremen, and construction workers.
“Our economy has more job openings than job seekers, and more Americans are joining the labor force,” Labor Secretary Alexander Acosta said when releasing the overtime update proposal. “At my confirmation hearings, I committed to an update of the 2004 overtime threshold, and today’s proposal would bring common sense, consistency, and higher wages to working Americans.”
However, the proposed rule has met with mixed reactions. Some complain about the added financial burden on businesses. Others, such as the nonprofit National Employment Law Project, say it falls far short. According to NELP, less than 7 percent of the salaried workforce currently receives automatic overtime coverage. The Obama rule would have increased that to a third; in the 1970s, it was more than 65 percent. We’ll see how the final rule comes out.
If you suspect that an employer has violated your protections under the law, contact Keller Grover for a free consultation. We can help you understand your options and steps you should take. In more than 25 years litigating fraud and employment cases, Keller Grover has recovered billions for its clients.