Overtime pay is supposed to compensate workers for the extra time they put in away from home as well as incentivize employers to limit the need to have employees work exorbitant hours. A healthy workforce requires work-life balance, but the overtime rule has been weakened to the point that few workers actually qualify.
In 2008, I was living in Alabama and had just dropped out of college. I took a job with a regional grocery chain where I made about $8.00 per hour. With limited prospects, I stayed in that job and a year later was promoted to assistant department manger resulting in a significant pay increase to $34,000 annually. It seemed great. I had effectively doubled my income in a single year, but there was a catch. As a salaried manager I was required to work more than 50 hours per week without any overtime pay. In fact, my wages after 40 hours didn’t even equal the federal minimum wage.
This is the reality for many workers across the country who are expected to work well over 40 hours per week, sometimes as much as 60 or 70 hours without any additional compensation. This is all due to exploited loopholes in the overtime rule which allows salaried workers earning as low as $23,660 annually to be classified as managers even if their primary duties include non-managerial tasks such as running a cash register or stocking shelves.
When I was a kid…being a manager meant being in the middle class. And rightly so. Managers supervise people, open and close the store, handle the money, and make important decisions. They should be able to own a home, raise a family and build a nest egg for retirement.
All in an attempt to reduce costs, unscrupulous employers have attempted to replace pay with some level of prestige by doling out important sounding job titles. But for workers, it means being overworked, underpaid, and a complete lack of work-life balance.
Last week however, the Labor Department made an important change to the rules governing overtime pay. Beginning on December 1, 2016, the income threshold for salaried workers to be exempt from receiving overtime pay will be doubled to $47,476. This means anyone earning less who works over 40 hours per week must be paid time-and-a-half.
This is an important victory for the 4.2 million workers–80,000 of whom live in Maryland–who will now earn greater salaries for the overtime they put in. Of the affected workers, 56% are women and a total of 1.5 million are parents meaning 2.5 million children will see an increase in their quality of life or will get to spend more time with their working parent(s). Racial and ethnic minorities make up a disproportionately large share of currently exempt workers, but under the new rule, 28% of exempt Hispanic workers and 28% of exempt black workers will become eligible for overtime pay.
Employers must now raise their workers’ salaries above the $47,476 threshold, pay time-and-a-half for all hours worked over 40, or limit employees hours to 40 per week by spreading out their workload. This will either mean more pay which is good for workers and the economy or more time for workers to pursue other interests whether that’s a second job, time with family, or a college degree.
Work is a human endeavor. No matter the task, the work we put in has value to our employer and is a sacrifice of our time and energy. Even for those who love their job, that sacrifice deserves to be compensated fairly.