Businesses were panicking in 2016 at the prospect of paying more to employees. At that time, a proposal was set to be enacted by the Department of Labor that would have doubled the maximum salary eligibility for overtime pay. The threshold was (and still is) $455 per week, or $23,660 annually.
Long story short, business owners and some lawmakers in 21 states banded together to sue the then-administration for its proposal. The rule was delayed, and a federal judge in Texas deemed it an overreach of authority.
Fast-forward to the present: A new proposed rule from the DOL is less ambitious than its predecessor, but it still expands overtime pay requirements for more than 1 million workers. The proposal includes a required increase to $679 per week, or $35,308 annually.
Unlike the previous DOL proposal, this increase won’t include automatic cost-of-living increases and leaves more than 2 million workers without the overtime pay requirement they would have enjoyed before the rule was held up in legal battles.
Why Overtime Matters
Overtime pay rules guarantee workers a 50 percent pay increase for hours exceeding 40 hours a week. These rules were enacted as part of the New Deal in the 1930s to ensure that employers didn’t demand too much of their workers and that workers would be adequately compensated should they be asked to work overtime.
Overtime rules make it more affordable for employers to hire two employees to work a combined 80 hours a week than demanding one employee work 80 hours per week. The intended effect of these rules has been diluted as inflation has pushed up the cost of living while the overtime threshold has remained stagnant.
Is the DOL Proposal Progress or a Step Backward?
Pro-worker advocates like Richard Trumka of the AFL-CIO called the newest proposal disgraceful. Labor unions and worker advocates believe this proposal disregards the financial needs of hard-working Americans and turns what was an appropriately ambitious effort to help workers into a watered-down bandaid designed to derail attempts to increase the income of millions of Americans.
Big business, on the other hand, is surely to be more optimistic about the current proposal than the one it faced just a couple of years ago. Businesses sprang into action to fight the 2016 increase, and they ultimately won. They might take similar steps to combat this rule, though because the proposal is less ambitious than its predecessor, this overtime pay requirement increase stands a better chance of becoming a reality.
Workers Aren’t Getting the Pay They Deserve – But There are Options
Because overtime pay requirements aren’t tied to inflation, fewer workers are covered by overtime pay rules than in years past. In the 1970s, approximately 65 percent of workers were guaranteed overtime pay, compared to only 7 percent today.
Even workers that in theory should be given overtime pay are denied time-and-a-half because they are misclassified. Some employees are misclassified as being exempt from overtime pay. Businesses get around federal requirements by labelling their employees ”assistant managers,” “shift managers,” “shift supervisors,” “team leaders,” “department managers,” or “unit managers.”
Other workers are labeled as contractors when they would be better classified as employees. They work primarily for one business and are often trained and given equipment by a business, but they receive none of the benefits that their “employee” counterparts receive, including overtime pay.
Basically, many workers simply aren’t given pay that they are legally entitled to. Many workers aren’t even made aware by their employers that they are entitled to overtime pay. In a perfect world, this would never happen. Sadly, it’s often up to workers to act to get the payment they deserve.
This area of the law can be complex, so it’s best to consult an attorney familiar with overtime pay laws to find out if you can claim back pay from your employer and receive the payment you deserve in the future. At the Feldman Legal Group, we have handled many of these cases, and we know how important it is for workers to get the payment they’ve rightfully earned.
If you believe you are owed overtime pay, you should explore your legal options by contacting the overtime lawyers at the Feldman Legal Group today to schedule a free case assessment with our team. You’ve worked hard for your employer, and you deserve the payment you’re entitled to by law. Give us a call or fill out our online contact form to get started.