Overtime Protection Extended To 4.2 Million Americans

A new rule finalized by the Obama administration will extend overtime pay protections to over 4 million workers within the first year. The new rule, which updates overtime regulations under the Department of Labor, will go into effect in December.

Back in 2014, President Barack Obama signed a memorandum directing the Department of Labor to update the regulations that define which white-collar workers are protected under the Fair Labor Standards Act’s (FLSA) overtime and minimum wage standards. Through the memorandum, Obama instructed the department to find ways to both update and simplify the regulations.

On July 6, 2015, the Department published the proposed rule in the federal register and invited written comments on it for a two-month period. The Department received over 270,000 comments on the proposed rule.

Once implemented, the new rule will provide overtime protections to 4.2 million Americans who are not eligible for it under existing federal law. The salary level for which most salaried workers are guaranteed overtime under federal law is now $23,660 a year. The new rule will double this cap to $47,476. Every three years, the salary level will be automatically updated.

Overall, the new rule is expected to increase wages for workers by $12 billion over the next 10 years.

The new rule is badly needed

The new rule is badly needed. A 2014 Gallup poll found that full-time employed Americans average 47 hours a week of work. And that is nearly a full day longer than the five-day, nine-to-five schedule standard. The poll also found that almost 4 in 10 workers said they work at least 50 hours a week, and only 8 percent of full-time workers said they work less than 40 hours.

In a speech last July, President Obama pointed out that over the last 40 years, “overtime protections eroded as a result of inflation and lobbyists’ efforts to weaken them.” The share of full-time workers who qualified for overtime based on their salaries decreased from 62 percent in 1975 to 7 percent today, Obama said.

Stories about overtime abuses put a human face to statistics. In an email, Obama mentioned a lady named Elizabeth Paredes from Tucson, Arizona, who wrote to him about her working conditions. As an assistant manager at a sandwich shop, Paredes worked as many as 70 hours a week without any overtime pay.

Many Americans have similar stories, and a few of them are chronicled in a 2014 report by the National Employment Law Project. Take Walter Bass, who worked as a pest control technician for a Brooklyn, New York-based company. He earned about $35,000 a year “going to commercial building sites, including office buildings and the Barclays Center, where he would conduct inspections, spray for pests, or put down traps,” as the report states. His employers planned out his workday and gave him a set schedule every day.

Bass was required to check in with his supervisor at each job site and could not leave a job site without permission from his supervisor. His shifts were only supposed to be eight hours a day, but they were typically longer, with Bass working as much as 13 hours a day at times. He also was required to answer emails within an hour, and on average he would spend up to two hours nightly answering them. The report characterizes his overtime hours as “unpredictable and uncompensated.”

People like Walter Bass and Elizabeth Paredes deserve to be compensated for the overtime they work. Or as Vice President Joe Biden said: “What it comes down to is that if you contribute to the success of the company that employs you, you should get paid fairly for it." Indeed you should.

Image credit: Flickr/Alper Çuğun