Federal Bill Proposal Seeks To Raise Overtime Threshold

In a combined effort to ensure overtime protections for low- and mid-wage salaried workers, Senator Tom Harkin (D-IA), Chairman of the Senate Health, Education, Labor, and Pensions (HELP) Committee, along with eight Senate officials, recently introduced the Restoring Overtime Pay for Working Americans Act.

Presently, the Fair Labor Standards Act (FLSA) guarantees a minimum wage and overtime pay for private-sector U.S. workers. However, many workers are considered “exempt” from the law, partly because of a salary threshold, $23,660 per year or $455 per week, which is specifically directed at managers and “professional” employees.

Essentially, salaried workers who earn at least that amount of money or more, along with other criteria, are not eligible for time-and-a-half for overtime.

If passed, the bill would ensure overtime protections by guaranteeing coverage to nearly 47 percent of salaried workers. Currently, only 12 percent of salaried workers enjoy such protections, representing a stark decline from the 67 percent mark in 1975.

Among its key provisions, the bill narrows the term “Primary Duty.” Primary duty previously referred to work which was performed the majority (more than 50%) of the time.  However, regulations issued in 2004 removed the majority requirement, thus allowing a worker to be exempt even if he or she spent only a few hours a week managing or performing other exempt duties.

More promisingly, the bill provides for a gradual overtime salary threshold increase for administrative and professional (EAP) workers from the current $455 a week level to $1,090 a week, essentially matching 1975 levels. In addition, the bill provides for a gradual increase for “highly-compensated employees,” by raising the threshold from $100,000- $125,000.

Simply stated, the Restoring Overtime Pay for Working Americans Act would make it more difficult for employers to declare a worker a managers they do not actually spend most their time managing. Indeed, as one sponsoring Senator noted, “Americans who work hard and play by the rules should be fairly compensated for a hard day’s work.”

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