Obama is a step closer to expanding overtime, but for how many American workers?
May 5th, 2015 | Laura Clawson
The Labor Department is moving ahead with President Obama’s eagerly awaited overtime pay expansion. That’s good news, but we don’t know yet how good. Currently, workers who make as little as $24,000 a year can be denied time-and-a-half if they’re considered managers—even if most of the work they do isn’t managerial. Obama has promised to raise that threshold to cover more salaried workers, but hasn’t said how high it will go, and the fact that the Labor Department has finalized a plan doesn’t change that. Yet:
The full proposal is now under review by OMB officials and won’t be made public for at least several weeks. After it is published, there will be a review period during which interested parties can comment on the proposed rule. The details of the rule are eagerly awaited by employers and worker advocates — not to mention overworked Americans — since they will ultimately determine who receives time-and-a-half pay when they work more than 40 hours in a week.
Just 11 percent of salaried workers qualify for overtime under the current rules. To cover the same proportion of workers who were eligible for overtime in 1975, the threshold would have to be raised from $23,660 to $69,004 ($58,344 if you adjust for increased education). To adjust for inflation since 1975, the number would be $51,168. Any increase will be an improvement that means overtime eligibility for millions more workers—meaning employers can’t save on wages by hiring salaried “managers” and expecting them to stock shelves 10 hours a day—but here’s hoping the Obama administration has chosen a number that will get us back to 1975 by one measure or another.
This blog originally appeared in Daily Kos Labor on May 5, 2015. Reprinted with permission.
About the Author: Author’s name is Laura Clawson. Laura Clawson has been a Daily Kos contributing editor since December 2006. Labor editor since 2011.