Raise your hand if you are paid on a salary basis and that salary is more than $23,660 per year but less than $47,476 per year. If your hand is up, then you might* be one of the unlucky people who should be getting paid overtime pursuant to a rule revised by the U.S. Department of Labor (USDOL) under the Obama Administration, but because that rule was blocked by a federal court in Texas before it ever took effect, you aren’t entitled to overtime. Now USDOL under Trump and Secretary Alexander Acosta is poised to adopt its own overtime rule with a much lower salary threshold.
The rule, which was set to take effect December 1, 2016, before the court blocked it, would have raised the salary threshold for overtime eligibility from $23,660 per year (less than the poverty rate for a family of four) to $47,476 per year, effectively raising the amount you must be paid in order for your employer not to have to pay you overtime. This means that most* workers making less than $47,476 per year (or $913 per week) would have to be paid overtime for each hour over 40 in one workweek in addition to their salary.
What has happened to the overtime rules since December 2016? Nothing – yet. But USDOL has repeatedly expressed an intention to lower the salary level based on complaints from business groups. Today USDOL started a series of “listening sessions” to ostensibly get the views and ideas of the public for how the overtime regulations should be revised. (Hint: “lower the salary level” is the only answer they are listening for.)
What does all this mean? Well, if your hand is still up but you make more than $31,000 per year, it’s time to put it down. Based on comments from Secretary Acosta and a USDOL “Request for Information” in July 2017, it is expected that the new salary threshold will be just $31,000, which is the 2004 overtime salary threshold adjusted for inflation. Two-thousand and four was the last time USDOL updated the salary threshold, but even then it was not an adequate adjustment. As the Economic Policy Institute explains, using that number will leave out three-quarters of the people who would have benefited under the Obama overtime rule, including an estimated 290,000 in North Carolina. If they lower the salary threshold as expected, those 290,000 North Carolina workers will still be required to work more than forty hours per week without being adequately compensated for that extra time. Unfortunately, this is just another example of the Trump Administration’s ongoing attack on low-wage workers.
*…The overtime regulation in question only changes one of the exemptions from overtime and does not apply in all workplaces and to all types of jobs. It has to do with what are often referred to as white-collar jobs, or the Executive, Administrative, Professional exemption. See the 2016 rule for more information.