Dive Brief:
- An article at The Nation reports on federal overtime laws, which currently say time-and-a-half is for ordinary workers and management is exempt from overtime provisions. So those promoted to “managers” no longer qualify for overtime—but still end up doing basically the same work for less.
- The article reports that generally, federal labor law requires elevated wages for hours worked over the standard 40-hour week. But in the precarious low-wage economy, advocates say employers are hyper-exploiting the system to skirt fair labor laws. The current threshold for "exempt" employees (not eligible for overtime) is $23,660.
- As it stands, a promotion might just mean a smaller paycheck for the same job in certain segments, mainly hospitality and retail.
Dive Insight:
Relief may be on the way, as the U.S. Department of Labor (DOL) has submitted its much anticipated proposed rule to address who qualifies for overtime pay protections to the Office of Budget and Management (OMB), a move cheered by the National Employment Law Project.
HR leaders eventually will have the opportunity to participate by sending comments into the DOL, once the OMB approves the new OT rules and they are published in the Federal Register. The new rules should be be in effect by early 2016, and employers in affected industries will have to adjust.
Experts estimate the new exemption threshold to be between $42,000 and $51,000—a major increase. There also will be changes in "primary duties" definitions, another move to make OT laws more fair for workers.
