Update on Overtime

Update on Overtime

Last night, President Obama’s made an important announcement on overtime. The Wage and Hour Division (WHD) of the U.S. Department of Labor has been working to update the rule that would extend overtime pay to nearly 5 million workers. The proposal would guarantee overtime pay to most salaried workers earning less than an estimated $50,440 next year.

This is incredibly important for workers who deserve a fair day’s pay for a hard day’s work -- and it’s great for business owners who are already paying their employees what they deserve.

Following months of extensive consultations with employers, workers, unions, and other stakeholders, WHD developed a proposal that would:

• Raise the threshold under which most salaried workers are guaranteed overtime to equal the 40th percentile of weekly earnings for full-time salaried workers. As proposed, this would raise the salary threshold from $455 a week ($23,660 a year) – below the poverty threshold for a family of four – to a projected level of $970 a week ($50,440 a year) in 2016.
• Extend overtime pay and the minimum wage to nearly 5 million workers within the first year of its implementation, of which 56 percent are women and 53 percent have at least a college degree.
• Provide greater clarity for millions more workers so they – and their employers – can determine more easily if they should be receiving overtime pay.
• Prevent a future erosion of overtime and ensure greater predictability by automatically updating the salary threshold based on inflation or wage growth over time.

Later this week, President Obama will travel to Wisconsin to talk more about this important step forward toward empowering the middle class and rewarding hard work with a fair wage.

We look forward to continue working together to help American workers.