Fair Labor in America: Overtime Laws
The Fair Labor Standards Act (FLSA), enacted in 1938, establishes overtime pay, among other employment-related issues (i.e. minimum wage, recordkeeping, and youth employment standards) for employees in the private sector as well as the public local, state and federal governments. Workers covered under FLSA are entitled to no less than one and one-half times their regular wage for any time worked over 40 hours in a workweek.
Congress granted the Department of Labor the authority and responsibility to make changes to overtime pay rules, periodically adjusting the salary level to make individuals eligible for overtime. The DOL has done so between the 1930s and 1970s, but not often over these several decades.
Perspective from the White House
Under president Roosevelt, overtime regulations were amended in 1940 and kept the salary test for executives at a lower threshold than the average salary. For several decades, no changes were made to the FLSA’s rules.
In 1975, the Ford administration raised the salary threshold, but less than the required amount to account for inflation. For almost 30 years, no further salary adjustments were made by the DOL, even though inflation continued to rise over the decades.
In 2004, the Bush administration’s overtime rules went into effect, which largely exempt workers earning more than $100,000 from overtime pay. Those with union contracts calling for overtime, however, continued to be eligible under the rules. It has been estimated that this amendment affected as many as a million workers, stripping away their ability to make overtime wages.
This change raised the salary to the current level, with only eight percent of full-time salaried workers falling below this amount.
Presently, the rules establishing which workers are exempt from overtime pay have remained stagnant over the decades, despite a steady increase in the cost of living. Without the changes, certain managers and professionals who make more than $23,660 annually – less than the poverty threshold for a family of four – and perform certain duties, are exempt from overtime pay.
Ten years later, President Barack Obama announced the Department of Labor was proposing a rule with the aim of expanding overtime protections to nearly 5 million white-collar workers within the first year of its implementation. The proposal guarantees overtime pay to most salaried workers earning less than an estimated $50,440 next year – as opposed to the prior salary threshold of less than $24,000. The number of workers in each state who would be affected by this proposal can be found here.
Even if your employer states you are not entitled to overtime pay, this may not be true. It is not uncommon for employers to misclassify workers in an effort to avoid paying overtime wages. Under current law, an employee may still be entitled to overtime pay depending on the nature of the work involved. If you or someone you know has been denied overtime pay, contact the skilled overtime lawyers at Ricotta & Marks, P.C. to learn more about your rights under state and federal laws. Call (347) 464-8694 for a no-fee initial case evaluation.