DOL Proposal Could Swell Overtime Ranks

It’s as American as the Fourth of July. Employees should be paid overtime for working more than 40 hours a week. Now the U.S. Department of Labor has moved to widen the number of workers who would be eligible for overtime.

Under current rules, salaried workers who earn $23,660 a year–$455 per week–qualify for overtime if they exceed a 40 hour workweek. But managers and supervisors are exempt from overtime. DOL suspects that some employees have designated workers as managers and supervisors to circumvent the overtime rules. As a result, DOL argues, many employees who should be getting overtime are being shortchanged, even if they work for more than 40 hours.

So DOL’s answer is raise that earnings threshold to $50,440 a year–$970 per week. That would make millions of more workers eligible for overtime pay.

The proposal is generating significant pushback from the business groups, who argue back that employers are likely to respond by cutting managers’ base pay and benefits if they have to grant overtime, to keep compensation costs level without raising prices.

Here’s DOL’s web page dedicated to explaining the proposal.

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