On July 1, more than a million workers became eligible for overtime pay.
The 1938 Fair Labor Standards Act established a 40-hour workweek with certain workers eligible for overtime pay of 1.5 times their regular wage if they work past the 40-hour mark. Those exempt from the overtime rule are salaried employees making above a certain threshold who primarily perform “executive, administrative or professional duties,” according to the Department of Labor.
Through the mid-1970s, the salary threshold for who was eligible for overtime was updated regularly “and over 65% of the salaried workforce was covered by overtime protections,” says Judy Conti, director of government affairs at the National Employment Law Project. But since 1975, that threshold was only updated twice: in 2004 and in 2019. Before the rule change on July 1, only around 15% of salaried workers were eligible for overtime pay.
That’s meant many low-wage workers are still working more than 40 hours per week and making very little money. “We see it in health care, we see it in janitorial, fast food, the food service and hospitality industry,” says Conti.
. . . .
“The whole point is when you make a certain amount of money, you have the inherent bargaining power to negotiate with your employer over wages, over hours, over duties,” says Conti. That change for high earners “is for people that don’t have that kind of bargaining power.”
. . . .
Read the full article at cnbc.com.
