Overtime rules could benefit 6 million workersNews added by Benefits Pro on August 22, 2014
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By Dan Cook

The U.S. Department of Labor is planning on amending the Fair Labor Standards Act so that more workers will be eligible for mandatory time-and-a-half pay for overtime hours. And, not surprisingly, according to a new report by the Economic Policy Institute, women and minorities will benefit much more from such a change than white males.

The study looked at what it would mean to double the existing threshold pay level that triggers the overtime pay. A threshold for professional overtime hours was set in 1975 at $455 per week so that professionals who were well paid at the time wouldn’t have to be paid extra, while those who could be seen as a financial disadvantage compared to other managers/professionals would be protected from abuse. The threshold has not been increased since 1975, and the likelihood is that it will increase to $1,000 a week or more.

The institute reviewed the workforce that is currently covered by the law; 21.7 million workers are currently exempt from the law. An increase to about $1,000 a week would cover an additional 6.1 million workers. Looking at those now exempt — the 21.7 million — by race and gender, here’s what emerged:

Of the 21.7 million who are above the current threshold (i.e., currently not automatically entitled to overtime protections), 41 percent are women. However, of those who would be newly covered if the salary threshold were raised to $984, 54 percent are women, a much larger share. In other words, women are more likely than men to have lower salaries that put them below the proposed new threshold. This means women would disproportionately benefit from the increase in the salary threshold.

The same basic pattern applied to black and Hispanic workers. Of the 21.7 million who are currently exempt, only 7 percent are black and 7 percent Hispanic, but of those who would be newly covered if the salary threshold were raised to $984, 9 percent are black and 11 percent are Hispanic.

Another group that would be disproportionately affected are workers under age 35. Of the 21.7 million who are currently exempt, 22 percent are age 25–34, but of those who would be newly covered if the salary threshold were raised to $984, 31 percent are age 25–34.

Education level also plays a role in this calculation. Of the 21.7 million who are currently exempt, 29 percent don't have a college degree, but of those who would be newly covered if the salary threshold were raised to $984, 45 percent do not have a college degree.

“Raising the salary threshold for overtime will help low-paid managers and professionals, especially women and people of color, who are not being compensated when they work over 40 hours a week,” said Heidi Shierholz, an economist at EPI who conducted the study.

The Department of Labor is expected to issue a notice of proposed rulemaking this fall, the news source The Hill reported.

Originally published on BenefitsPro.com
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