Changes to Overtime Law May Mean Higher Wages for Salaried Workers
Amidst protests for higher minimum wages, the Obama Administration is preparing an executive order that could mean boosts in income for millions of white collar salaried workers by removing some restrictions in the current laws concerning overtime.
These proposed changes would increase the threshold of income under which all salaried workers would be entitled to overtime pay—and this also includes professionals and managers.
Overview of the Current Law
Currently, the industry operates under the 1938 Fair Labor Standards Act which requires all employers to pay overtime to those who work more than 40 hours in a week, but there are broad exceptions for salaried workers. However, for an employer to qualify for those exemptions, the employees in question must receive a salary of at least $455 weekly or approximately $24,000 annually. Any employee who makes under this threshold is entitled to overtime pay, but plans were initiated in March 2014 to increase that amount and tighten the necessary requirements for white collar overtime exemptions.
The White House stated last year that current law has left many salaried workers with no protection of overtime, and sometimes even minimum wage. One obstacle to making this change is the U.S. Chamber of Commerce, which feels changing the rules regarding eligibility for overtime will increase the costs of labor and force employers to seek other ways to cover those increases.
Projected Changes
It is not yet clear how high the new threshold will raise the income level before salaried workers become ineligible for overtime pay. Democrats in the Senate are urging the President to increase it to $56,000 while Democrats in the House are seeking an increase to $69,000. While the Administration has not stated where it is likely to place the threshold, a source in the Labor Department’s wage and hour division has told news sources that it may be in the $30,000 – $50,000 range.
Impact on North Texas Workers
If we assume the new threshold will be around $56,000, it’s easy to see how the change could increase overtime eligibility for thousands of residents in Dallas-Fort Worth and across north Texas. The American Community Survey showed data that suggested approximately 413,326 workers in Dallas County alone earned between $24,000 and $56,000 in 2013. These figures only account for private industry workers and do not include government workers or non-profit organizations (who are not customarily covered by the Fair Labor Standards Act). The changes would have no effect on hourly workers since those workers are already entitled to overtime pay. Additionally, these overtime rule changes still do not apply to doctors, lawyers, or outside salespersons regardless of how much they make.
Category: In The News
