Whatever happened to overtime? That is the answer that Nick Hanaur of Politco seeks to answer in a recent article. Overtime is protected by the Fair Labor Standards Act, a federal law that dates back to 1938. Under the FLSA, most employees are entitled to 1 ½ their regular rate of pay for any hours worked over forty. There are a few exceptions. Salaried employees who have very specific job duties are exempt from overtime if they make $455.00 per week. This $455.00 per week number has stayed stagnant for a long time. That means that a “manager” or “executive” who works sixty hours per week only has an effective hourly rate of $7.58 per hour if they work a sixty hour work week. As hours have gotten longer and pay has gotten less, this is not unusual. Managers who work especially long hours may make less than minimum wage.
Hanaur’s article makes the argument that the government’s failure to raise the salaried threshold for exempt employees is having a significant impact on the middle class. Indeed, it is decreasing the number of people that are in the middle class. It may come as a surprise that Congress is not the entity that sets this number. Instead, the United States Department of Labor has “rule making” authority to issue regulations that would increase this threshold number. The Obama Administration has signaled that it was going to raise this threshold, but has yet to act. Hanaur makes a persuasive argument that such action is overdue. To read his article, follow this link:
http://www.politico.com/magazine/story/2014/11/overtime-pay-obama-congress-112954.html