This is a very big deal
Earlier this week, at the direction President Obama, the US Department of Labor proposed updates to the rules that decide which working people are eligible for overtime. These updates dramatically increase the number of working people eligible to receive overtime pay, making a long overdue change that will reverse 40 years of neglect.
The proposed changes made today by the USDOL will increase the threshold to $970 per week or $50,440 per year, covering an extra five million working people. These changes could lead to higher wages for some or more time for others (at the same pay).
Announcing the changes on Huffington Post, President Obama said, “We’ve got to keep making sure hard work is rewarded.”
Right now, too many Americans are working long days for less pay than they deserve. That’s partly because we’ve failed to update overtime regulations for years — and an exemption meant for highly paid, white collar employees now leaves out workers making as little as $23,660 a year — no matter how many hours they work. — President Obama, 6/29/15
This proposed rule will help promote higher take-home pay and allow workers to better balance their work and family obligations. In so doing, it will help shore up the middle class and offer an easier pathway for those aspiring to share in the standard of living it affords.
The White House has provided a fact sheet that shows the number of affected working people by state. Once formalized, the new overtime rules will boost the pay of 160,000 North Carolina workers. That is a big deal!
Way back in March 2014, President Obama directed the Labor Department to update overtime eligibility rules to restore the overtime protection workers have lost to inflation since 1975.
Under federal overtime regulations, workers who earn less than a certain salary level are generally entitled to overtime protection. President Ford made the last regular adjustment to the salary level in 1975. No further adjustments were made for the next 29 years.
The current federal threshold for overtime is $455 per week—or $23,660 per year. To simply make up for inflation, it should be raised to $51,168. Many workers who would benefit from restored overtime protection are employees at banks, Walmart, and fast food restaurants. Insurance clerks, secretaries, low-level managers, social workers, bookkeepers, dispatchers, sales and marketing assistants and employees in scores of other occupations would also benefit.
The USDOL is taking public comments for 60 days and will then issue a final rule soon after. They need to hear from us! To help drive comments, we have developed a user-friendly website: www.aflcio.org/overtime.
Will you benefit from President Obama’s update to overtime rules? We’d like to hear from you! Send us an email.