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Changes To Overtime Access On The Horizon

The right to receive overtime pay for working more than 40 hours in a week applies to many workers. There are some, however, who are exempt from the requirement. Most exempt workers are excluded because their work is considered executive, professional labor. These workers are believed to have enough authority or autonomy to avoid the requirement of paying them overtime. Many employers abuse the system by classifying workers as exempt without giving them the autonomy required to be considered executive workers. One of the ways to prevent this problem was to set a salary floor, under which an employee cannot be considered exempt.

The salary floor for exempt employees is currently $23,660. A recent proposal from the Department of Labor would increase the salary floor for exempt status to $50,440. If the proposal becomes law, a substantial number of workers could find themselves reclassified to nonexempt employees. This would require their employers to pay them time and a half for hours worked beyond 40 per week.

One likely result of the change would be an increase in the number of lawsuits from workers who are denied proper overtime pay. Misclassifying workers is a favorite strategy used by employers to save money. While a new ceiling floor makes this harder, it doesn't change the underlying motivation. An employer willing to misclassify workers is already violating U.S. labor law. It is not hard to imagine employers switching to another violation of the law, asking workers to work "off the clock" to maintain cost savings at the expense of worker rights.

A new salary floor is long overdue. The current floor was embarrassingly low when it was set in 2004. It has only grown more ridiculous as time has passed. If the Department of Labor includes the new floor in its final rule and the rule is approved, it will become slightly harder for employers to deny their workers the overtime they deserve. That is a move in the right direction.

Source: U.S. News & World Report, "Are the New Overtime Rules About to Boost Your Paycheck?," by Alison Green, 9 May 2016 

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