Where Should the Overtime Salary Threshold Be Set? A Comparison of Four Proposals

[xchrom]

http://www.epi.org/publication/where-should-the-overtime-salary-threshold-be-set-a-comparison-of-four-proposals-to-increase-overtime-coverage/

Where Should the Overtime Salary Threshold Be Set? A Comparison of Four Proposals to Increase Overtime Coverag

In March 2014, President Obama directed Secretary of Labor Tom Perez to prepare an update of the regulations that govern exemptions from the Fair Labor Standards Act (FLSA) requirement that employers pay time-and-a-half for work beyond 40 hours in a week. The so-called “white collar” exemptions for professionals, executives, and administrators include a threshold salary below which every employee is guaranteed overtime pay regardless of his or her work duties. Above that salary level, the employer doesn’t have to pay anything for overtime hours—not even minimum wage—if the work performed meets certain criteria.

So, where should the salary threshold be set? In the past year, four significant proposals have been made. The lowest proposal, for a threshold of $807 per week or $42,000 a year, is rumored to be under consideration at the Department of Labor (DOL). Jared Bernstein and I recommended a simple inflation adjustment of the 1975 threshold: $984 per week or $51,168 a year. In a paper for EPI, Heidi Shierholz suggested that $1,122 per week, or $58,344 a year, was appropriate because it would guarantee that the same share of salaried workers receive overtime protection as were protected in 1975—after adjusting for the different educational composition of the workforce today. The highest figure, proposed by Nick Hanauer, is $1,327 per week, or $69,004 a year. It represents the salary level that would cover the same share of salaried workers as in 1975, but without adjustments for changed demographics.

[w4rma]

1. Why have a threshold, at all? Folks who make over $70K don't need to be working overtime either.

And if they are then their companies can renegotiate their contracts to account for their overtime. Keep it simple.

[on point]

2. Kiss. No salary exemption period. Make corps treat all employees better

Otherwise they exploit those they can

[Sivart]

3. No threshold - should be a no brainer

I agree there should be no threshold. Everyone should get paid for every hour they work.

Businesses don't give you a little extra for free if what you paid for comes up a little short.

[brooklynite]

5. Paying for every hour has nothing to do with overtime...

I have had an annual salary, and spend the time necessary to do the work I'm paid for.

I suspect you'll find a fair number of people don't want the perceived protection of overtime

[R.A. Ganoush]

8. You bring up an interesting point about the protections of OT

And I've never quite understood it.

My company specializes in wage & hour compliance for small businesses (typically under 100 employees) who don't have a person dedicated to understanding or interpreting the interactions between state (in my case, NY) and federal labor regulations.

One of the services I provide is to audit positions to determine if they meet the thresholds for any of the available exemptions (there are actually 22 under the Fair Labor Standards Act). In a majority of cases (between 75-80%), when I've determined that the position doesn't meet the standard, and we've had to revert them to an hourly status; the look I get from the employees is that I've just stolen their firstborn child.

It's surprising how many people look at having to record their work hours (and thus being eligible for OT), as a slap in the face. To them, being salaried is a status symbol; they're beyond it. No matter how many times I try and explain to them that they're better off this way financially, they don't want to hear it. Even after their employer meets the good faith Safe Harbor requirements giving them back pay.

It is odd, I will say that.

[belzabubba333]

4. ot for everyone working past 40 hours a week or 8 hours a day that's it how simple is that

[mythology]

6. I don't agree that working over 8 hours in a day should automatically mean overtime

For example, tomorrow I have an afternoon appointment, so I logged in to work an hour early today. Thus, today I'm working 9 hours and tomorrow I'm working 7. I don't think that I should get an hour of overtime, but only 39 hours of regular time for the week.

I also think that if an employee wants to work 4 days a week and get their 40 hours in, they shouldn't get overtime for working 10 hour days if that is something that works better with their schedule.

Making it a universal 8 hour day takes out a lot of flexibility for workers.

[GummyBearz]

7. Yes

I am with you 100%. I often like to take a half day here or there, then work an extra 2 hours a couple other days in the pay period to even it out.

I may be wrong, but I think the OP was trying to bring up the subject of a certain city/county/state employee (there was a post a few days ago), in which an hourly worker reported over 14 hours of work per day, 7 days a week, for this entire year, and collected something north of $290K in yearly wages (which was more money than the director of his entire region made).

To me that is absurd. There is no way in hell that guy is working efficiently after 14 hours a day EVERY SINGLE DAY, so its a tax payer rip off. And at the same time he is actually sucking up money that could be used to higher at least 2 other workers. (My math here assumes 1.5x OT pay, 60 hours of OT per week, which is then 90 hours a week of normal pay that could go to other people, who would obviously be more awake and efficient on the job).

Whether the OP was intending to discuss that or not, I'm not sure. But I sure as hell wouldn't allow an employee under me to get away with something like that.