In early July, the Department of Labor proposed changes to the country’s overtime regulations. Labor Secretary Tom Perez said he’s looking to extend overtime protections to an additional five million workers as early as next year.
If you cover employment issues, here’s what you should know about the pending regulation change.
Proposed Overtime Regulation Changes
Currently, workers earning less than $23,660 have overtime protections under the Fair Labor Standards Act. Fewer than 10 percent of salaried workers are currently covered by these overtime protections.
Under existing law, if a worker is salaried at more than $23,660 and they perform certain “white collar” executive, professional or administrative duties, their employer is not required to pay overtime. (Examples include executive assistants, insurance professionals and even many journalists.)
Under Perez’s proposal, the overtime salary threshold would more than double, to $50,400, making numerous white collar salaried workers automatically eligible for “time and a half” for any hours over 40 they work, regardless of their job duties.
The new overtime regulation is projected to impact about 40 percent of the country’s full-time salaried workforce, according to Perez. Also, going forward, the new regulation would adjust the salary threshold annually based on Bureau of Labor Statistics data to ensure about 40 percent of the salaried workforce is always eligible.
Potential Impact on Workers and Businesses
That means up to five million workers may soon be eligible to start receiving overtime pay, according to the Department of Labor, if the rule is implemented as written.
Critics include small business owners and small business associations, which say it will burden already thin profit margins. They warn that these same employees may lose some perks and flexibility associated with their managerial roles or even face demotion in order to preserve the bottom-line.
The National Federation of Independent Businesses has issued a statement that mobility for low-to-mid-level managers may be reduced. The National Retail Federation and the National Restaurant Association also put out strong opposition to the changes.
Covering Changes to Overtime Protections
It could take months for the Department of Labor to finalize the proposal based on public comments, but you can get working on stories about it right now.
- Crunch the numbers the Bureau of Labor Statistics collected about full-time salaried workers in 2014 and 2015 for interesting reporting angles.
- Interview white-collar professionals in your community–how do they think the change will affect them? If they have more discretionary income, how would they spend it? What companies stand to benefit?
- Look for local businesses who have been outspoken about the change. How would the need to pay employees for the overtime they perform impact their business operations? Would they give workers a big raise to be available at all hours? Or would they cut compensation, benefits or their workforce?
- Ask your regional labor department office how new regulation might change the way professionals take work home with them. Would they now get overtime for answering emails after hours?