Overtime

Overtime pay rules are designed to ensure that most workers who put in more than 40 hours a week get paid 1.5 times their regular pay for the extra hours they work. Almost all hourly workers are automatically eligible for overtime pay, but workers who are paid on a salary basis are only automatically eligible for overtime pay if they make below a certain salary. Above that level, employers can claim that workers are “exempt” from overtime if their primary job duties are considered “executive,” “administrative,” or “professional.”

The pay threshold that determines which salaried workers are automatically eligible for overtime pay has been so eroded by inflation that workers earning as little as $455 per week (the equivalent of $23,660 per year) can be forced to work 60 or more hours a week for no more pay than if they worked 40 hours. The extra 20-plus hours are completely free to the employer, allowing employers to exploit workers with no consequences.

In 1975, more than 60 percent of full-time salaried workers were under the salary threshold and hence automatically eligible for overtime. By 2016, because of this erosion, the share had dropped to less than 7 percent. The new overtime rule would have partially restored that share, bringing it up to 33 percent.

A 2016 federal rule would have raised the salary threshold below which workers are automatically eligible for overtime pay—from $23,660 to $47,476 per year—restoring some of the coverage lost as inflation increasingly eroded this crucial worker protection. At $913 per week (or $47,476 for a full-year worker), the threshold that the 2016 rule set is equivalent to the 40th percentile of weekly earnings for full-time salaried workers in the lowest-wage U.S. Census Region (currently the South). It is a significant but still conservative boost, approaching a level of pay that a modestly compensated manager might have.

However, a district court in Texas blocked DOL from implementing and enforcing the rule in 2016 and then, in August 2017, held that the rule was invalid.  As it becomes clear whether this ruling will, in effect, kill the overtime rule, some states are considering implementing their own revised overtime eligibility threshold to restore overtime protections to workers.

In 1975, more than 60 percent of full-time salaried workers were under the salary threshold and hence automatically eligible for overtime. By 2016, because of this erosion, the share had dropped to less than 7 percent.

Publications

Maine bill to fix overtime will restore the promise of extra pay for extra work

When Mainers work extra hours, they deserve extra pay. The 40-hour workweek has been a pillar of the American economy for decades. It’s still what most of us envision when we think about a “full-time job.”

If the 40-hour workweek is one side of a coin, overtime protection, which provides time-and-a-half pay for hours worked beyond 40, is the critical flip side. Overtime pay buttresses the 40-hour workweek as a norm. It ensures full-time workers can expect a decent work-life balance and will be compensated when that balance is thrown off. But outdated and difficult-to-enforce overtime laws mean many Mainers are stuck with lower wages even if they’re willing or required to work long hours.

Time Is Money, Unless You’re Salaried

Washington’s Department of Labor & Industries has launched a long overdue process to establish an updated salary threshold and other rules that determine who is exempt from basic legal protections. Families across the state struggle to achieve and maintain economic stability in the face of slow wage growth and skyrocketing costs for housing, health care, childcare, and other necessities. Because Washington’s threshold is so woefully out-of-date standards, almost any salaried employee can now be required to work more than 40 hours per week with no additional pay and can also be denied access to paid sick leave. Updating our state standards would benefit up to half a million individual employees and their families, restoring Washington to a position of national leadership in protecting the health and well-being of its people and communities.

Modernizing Overtime Rules in Colorado

Workers should be paid for the hours they work. However, many salaried workers who work overtime miss out on valuable compensation when those hours are unpaid. Changing current overtime rules in Colorado to ensure these workers are accurately paid for the hours they work over 40 a week would boost their earnings, address the financial squeeze Coloradans face today, and help create a better work-life balance for many workers.

Hour Crisis: Unstable Schedules in the Los Angeles Retail Sector

  • March 22, 2018
  • UCLA Labor Center & LAANE

The retail sector is an integral part of the Los Angeles landscape with almost half a million workers in the county, and 147,157 workers in the city. Retail makes up one-tenth of the private sector workforce in the county and is its second largest employer. Yet more than half of the county’s workforce earn low wages. In the past few years, local and statewide policies have focused on transforming low-wage work, including a raise in the minimum wage, increased worker protections, and required paid time off. Despite the statewide strengthening of workers’ rights protections, the unreliable hours and unpredictable schedules endemic in the retail industry mean these benefits become inaccessible to many workers. In part, the retail industry relies on scheduling practices that are not good for workers, such as forcing them to wait for their weekly schedules with only a few days notice. These practices not only undercut workers’ hours and their expectations thereof, but also their incomes, and can make it nearly impossible for workers to realize full and healthy lives.

Hour Crisis: Unstable Schedules in the Los Angeles Retail Sector explores worker hours and scheduling practices for “frontline floor” staff that include salespersons, cashiers, stockers, and food workers in large and chain stores. We used a participatory and research justice approach and worked with students, workers, and community partners to collect and analyze the data. Using mixed-sampling methodology, we collected a total of 818 surveys. In addition, we analyzed government data and conducted an extensive review of existing policy and academic literature on the topic.