Millions of Americans Would Benefit From Expanding Overtime Pay
Americans are working harder and earning less. But finally, progress is being made on an often-overlooked policy that has a substantial effect on this trend: overtime pay. Last week, the Obama administration came one step closer to fulfilling an executive order to reform overtime rules. We don’t know the details of the proposed rule yet, but if President Obama restored federal overtime standards to its inflation adjusted 1975 level, workers earning up to $51,168 would qualify to earn overtime pay. That would mean up to 47 percent of the salaried workforce—6.1 million people—would have more money in their pockets or more time to spend with their friends and family.
The administration’s full proposal to expand the population eligible for overtime pay is now under review by to the Office of Management and Budget (OMB). But there are still a few steps left in the process before the rule can become final. After the rule is reviewed by OMB, it will be published and then there will be a period during which interested parties can submit comments on the rule.
Americans are overdue for an overtime update. In 1975, more than 65 percent of salaried workers earned time-and-a-half pay for every hour worked over 40 hours. Today, only 11 percent do. The threshold for overtime pay has fallen so much that current overtime law, by definition, no longer covers the middle class. Only workers earning less than $23,660 a year—below the poverty line for a family of four—qualify for overtime pay.
Increasing eligibility for overtime pay makes sense, and Americans know it. Support for increasing the threshold for overtime pay is incredibly high, according to a new poll released today:
- 73 percent of voters support some substantial increase in the overtime pay threshold.
- 65 percent of voters think workers making up to $75,000 a year should receive overtime when working more than 40 hours a week, regardless of job classification.
- 64 percent of all voters—and 54 percent of Republicans—said they are more likely to vote for leaders who support increasing the overtime threshold.
BOTTOM LINE: Americans deserve to be fairly compensated for their hard work. But instead, they are working harder and longer to stretch their earnings just to keep up with the cost of living. Our current overtime law is long overdue for an update and the Obama administration’s executive order would help millions of Americans get more money in their pockets or more time to spend with their friends and family.
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