Executive Council Statement | Better Pay and Benefits

For American Workers, Overtime Protections Bring Jobs, Income and a Life

Now is the time to expand overtime protection, not take it away.  The purposes of the overtime laws are as urgent today as they ever have been.  Those purposes are to encourage businesses to hire new employees instead of overworking existing employees, and to compensate workers for the burden of working long hours.  With 24 million workers in need of full-time employment, we need to give employers more incentives to hire.  With wages barely keeping up with inflation, we need to find new ways to support worker purchasing power and consumer demand.  At the very least, we need to prevent the erosion of overtime protection that occurs every year when wages and salaries rise with inflation, and under no circumstances should we strip overtime protection from workers in specific occupations such as computer systems analysts, programmers, software engineers, or other information technology workers.

The Fair Labor Standards Act (FLSA) of 1938 set the standard for a 40-hour work week by requiring employers to pay their employees time-and-a-half for overtime hours in excess of 40 per week.  The FLSA was the culmination of over a century of struggle, in which many workers sacrificed their lives not just to improve the hours and conditions of their own employment, but to improve living standards for all workers and make our society more socially and economically just.  This historic achievement for the labor movement and for all workers in America should not be underestimated or disrespected, and it must not be given away or reversed under any circumstances.

Already, workers are losing overtime protection every day as wages and salaries rise with inflation.  Under current overtime eligibility regulations (Part 541), workers who earn less than a weekly salary threshold (generally $455 per week) cannot be denied overtime eligibility by being classified as executive management, administrative management, or professional employees.  However, this protective salary threshold is not currently indexed to inflation, so every year more and more workers are bumped above the threshold and become vulnerable to losing their overtime eligibility.

When the Labor Department last updated the overtime salary thresholds in 2004, it declared that “the Department intends in the future to update the salary levels on a more regular basis, as it did prior to 1975.”  Yet the overtime salary thresholds are the same today as they were eight years ago.  It is time to update those levels and index them to prevent more and more workers from losing overtime protection every year.  We look forward to working with Congress and the administration to update and preserve overtime protections in this way.

The current overtime eligibility regulations allow employers to deny overtime eligibility to “computer professionals” who earn as little as $455 per week on a salary basis, or $27.63 on an hourly basis.  It has never been clear why computer professionals should be denied overtime protection at all, especially if they earn this little.  Computer professionals need protection from excessive hours as much as other employees do, and their employers could apparently use an incentive to hire more workers.  The first question we should ask regarding any proposal to roll back overtime eligibility is this: why is it, exactly, that overtime protection for these particular employees would not further the purposes of the FLSA? 

Putting aside the question of whether there is any justification for denying overtime eligibility to these particular employees, the protective salary threshold for computer professionals obviously needs to be updated and indexed.  Just to keep up with inflation since the salary threshold was first established, the hourly threshold would need to be raised to $45.63.

However, legislation has been introduced in Congress that would take us in the opposite direction.  The Computer Professionals Update Act (S. 1747) would strip overtime protection from large numbers of computer systems analysts, computer programmers, software engineers, and other hi-tech employees.  According to the Congressional Research Service (CRS), S. 1747 “effectively eliminates overtime protection for all IT professionals.”

The corporations lobbying for S. 1747 would undoubtedly prefer to pay their employees less and overwork their existing workforce rather than hire new workers or pay a fair wage.  This is not new behavior on the part of employers.  In fact, it was in response to this kind of behavior that Congress passed the FLSA.

In this case, IBM, Oracle, and other information technology employers paid tens of millions of dollars to settle allegations that they broke the law by not paying time-and-a-half.  After agreeing to the settlement, IBM gave its workers a pay cut.  Now IBM and other IT companies are asking Congress to weaken the law they were accused of breaking.  Congress should not repeal the FLSA piece by piece by accommodating employers every time they ask for permission to pay their workers less and make them work longer hours.

The AFL-CIO calls on Congress to honor the intent of the FLSA by categorically rejecting S. 1747 and all other proposals to roll back overtime eligibility.  Instead, Congress should take action now to reverse the erosion of overtime protections that has already occurred in recent decades, and to update and index the overtime salary thresholds so workers do not lose overtime protection as wages and salaries rise with inflation.