This week, we were thrilled to hear the proposed rule change by the U.S. Department of Labor that would extend overtime protections to nearly five million workers within the first year of it’s implementation; an analysis from the Economic Policy Institute predicts more than 11 million workers would benefit from the rule change. Currently, if an employee is salaried at $23,660 a year (or $455 a week) and falls under the “white-collar” exemption they are not entitled to any overtime pay. The new rule would change the amount, which was updated only once since 1975 in 2004, to $50,440 a year or $970 a week.
Right now, the Department of Labor is collecting comments during a 60-day period from stakeholders and supporters about the proposed changes to overtime regulations. At IWJ, we're gathering comments online and will deliver them to the Department of Labor before the Sept. 4 deadline. Click here for sample language and to add your comments.
Since it opened in 2013, four different workers visited the Chicago Wage Theft Legal Clinic seeking legal advice but were not entitled to overtime because they made above $23,660 a year and fell into the “white-collar” exemption. These workers were not highly compensated executive, administrative, and professional employees, which the law was intended to cover. Instead, all of these workers were either fast food restaurant managers and assistant managers or convenience store managers. All were making between $24,000 and $30,000 per year and very single one of them who came to the clinic was working between 55 and 70 hours a week.
Their employers knew the rules and knew exactly how much salary they would have to pay them in order to take advantage of them and exclude them from overtime protections.
Because their jobs duties included supervising two or more other employees, managing the restaurant or store when they were on duty, and because their opinions on hiring and firing employees had weight in the decision making process, every one of the four workers fell under the “white-collar” exemption. This is not what was intended when these overtime rules were originally written. And while these new rules do not contain revisions to those “white-collar” exemption duties tests, which would prevent these four individuals from being taken advantage of, we're hopeful that information provided during the public comment period may cause the Department of Labor to reconsider making adjustments in the future.
This rule change will have a positive impact on workers across the U.S. One thing is certain, if these rules were already in place the four managers and assistant managers that visited the legal clinic would be much better off.
Yet, if some predications come true and employers switch some salaried employees to hourly employees it will be more important than ever that the Department of Labor issue a clear paystubs regulation. This will allow workers to see their pay rates and exactly how many hours they worked, which will help them ensure that they are receiving the overtime that they are finally owed.
Julian Medrano is IWJ's Legal Director, in addition to supporting our team and affiliates with legal capacities, he runs Interfaith Worker Justice’s pilot wage theft clinic and is committed to providing all individuals access to the justice system. Photo courtesy: Bernard Polet, Flickr