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America Gets A Raise: Change In Overtime Pay Is Coming Soon

It's not just managers in lower-paid jobs in this bucket. Exempt positions also include administrators and sales employees,
America Gets A Raise: Change In Overtime Pay Is Coming Soon
Image from: MikeKalasnik

This is good news, especially for "managers" at big-box stores like Walmart, whose business model revolves around giving people titles that essentially mean they can work you extra hours without paying you:

The Obama administration is expected to move forward soon on its plan to provide overtime pay protections to low-salaried managers who don't qualify for them.

The move could affect millions of workers. It is aimed at addressing what the White House says is an erosion of the rules that established the 40-hour workweek -- a "linchpin of the middle class."

The way it works now, companies can avoid paying OT to any full-time workers making as little as $23,660 -- or $455 a week -- by classifying them as "exempt" and paying them as salaried employees, rather than hourly.

That means when they don't get overtime pay even if they work more than 40 hours a week.

And it's not just managers in lower-paid jobs in this bucket. Exempt positions also include administrators and sales employees, among others.

The expectation among policy experts is that the Department of Labor will propose raising the $23,660 income threshold, most likely to somewhere between $42,000 and $52,000.

The agency may also amend how "exempt" duties are determined.

Advocates for an increase, like EPI and the National Employment Law Project, would like to see the threshold raised to at least $51,168 -- or $984 a week.

That threshold would provide automatic overtime eligibility for 47% of workers. That's up from 12% today but still below the 65% eligible in 1975.

What's more, advocates would like the Labor Department to be more specific as to what makes a position exempt from overtime. For example, to be classified as an exempt administrative employee, a worker's primary duty must include the "the exercise of discretion and independent judgment with respect to matters of significance."

Since every job requires some independent judgment, "that's meaningless," said Judi Conti, NELP's federal advocacy coordinator.

She would rather the department require that at least 51% of a worker's time be spent on exempt duties.

That would help prevent hollow promotions where a low-paid worker is given the title of manager but not given much managerial power, Conti noted.

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