Overtime rules can be a powerful way to prevent working people from getting overworked without getting paid more for their additional effort. Such rules protect both working people and their families, but the federal rules on overtime are out of date and don't protect nearly enough Americans. The Barack Obama administration recently proposed updates to these rules that would help millions of Americans. NW Labor Press describes the update to the rules:
The update has to do with which employees are eligible for overtime pay. Under the Fair Labor Standards Act, workers must be paid time-and-a-half for every hour they work over 40 in a week, but [salaried] 'executive, administrative and professional' employees can be considered exempt from the overtime pay requirement. Increasingly, employers have been paying low-level managers on a salaried basis and claiming they’re exempt from overtime. They get away with it because the Department of Labor says it’s okay to exempt managers from overtime if they’re paid on a salaried basis and the salary is over $23,660 a year. That dollar amount was last updated in 2004 after being unchanged since the 1970s, and it was too low even in 2004. The Obama administration’s new rule raises it to $47,476—more along the lines of what it was in the 1970s, adjusted for inflation—and indexes it to wage growth from now on. The change is expected to affect over 4 million American workers.
Rep. Kurt Schrader (D-Ore.) has proposed legislation that would delay the scheduled increase in the overtime salary threshold for three years. The Schrader bill would also gut a key provision of the new rules—the one that indexes the salary threshold to wage growth, which is necessary to keep people from losing their overtime protection over time. This indexing provision is one of the key reasons why the administration proposed new overtime rules in the first place.
If the Schrader bill were to pass, an estimated 10.4 million fewer working people would have salaries below the threshold by 2035, which means they would be less likely to have overtime protection.
Schrader is wrong and this legislation will hurt both working people and the economy.