4.7 Million Americans Now Eligible for Overtime Pay Under New Policy

Illustration for article titled 4.7 Million Americans Now Eligible for Overtime Pay Under New Policy

On Tuesday morning, the Department of Labor released an overtime policy proposal that would substantially raise the base wages of workers who are classified as “managers”—and thus ineligible for time-and-a-half—despite receiving pay as low as $23,000 per year.

President Obama announced this plan on Monday night, stating his intentions to double that minimum threshold to $50,400; according to the Economic Policy Institute, this would expand the cohort of Americans eligible for overtime from 8 percent of the salaried workforce to 40 percent. Via the Washington Post, Obama had laid ground for this plan starting in 2014, when he pointed out that these overtime regulations had been set in 1975 (when 62 percent of salaried workers were eligible) and not updated since, leaving a significant portion of workers in the lurch. From today’s DOL release:

For example, a convenience store manager, fast food assistant manager, or some office workers may be expected to work 50 or 60 hours a week or more, making less than the poverty level for a family of four, and not receive a dime of overtime pay. Today’s proposed regulation is a critical first step toward ensuring that hard-working Americans are compensated fairly and have a chance to get ahead.

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The Department of Labor is also considering tightening their definition of “manager” so that restaurant and retail managers who spend most of their time in customer service (and are paid accordingly) will have another form of wage protection; in California, for example, to be an overtime-ineligible manager, more than half of your work time must be spent on management tasks. (The restaurant industry, however, opposes this regulation.)

The new policy—which does not need Congressional approval and will not change anyone’s abilities to exploit their workplaces by redistributing work as cheaply as possible—will take effect in 2016 and affect 4.7 million Americans. It’s in line with public opinion supporting greater overtime eligibility, and it’s the result of a significant amount of institutional progressive activism. It’s great news after years of wage stagnation, uneven recovery, and the horrible creeping expansion of the concept of “workweek.”


Contact the author at jia@jezebel.com.

Image via Fox

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DISCUSSION

HaHaYouFool
HaHaYouFool

This is a good step in the right direction. For many years, my sister managed fast food restaurants or pizza franchises. Her salary was in the low 20s, and the bonus structure, based upon food costs and labor costs, was nearly impossible to maintain (and often would change without notice; it’s an incredibly unfair system of compensation). Frequently, the only ways she could make her numbers to get the bonuses would be to understaff the restaurant, working all the hours herself. She’d get her bonus, but would work upwards of 80 hrs/week to do so. As a result, her per/hour wage was often quite a bit lower than that of the delivery drivers or shift workers, plus she had to deal with all the owners’ bullshit. I have no doubt that these new rules are going to put a lot of franchisees in a tough spot financially, and some may even fold, but after the initial period of sorting out, this is going to be incredibly good for folks like my sister.