Have you looked at your company’s overtime policies lately? If you haven’t, you should. Recently, President Barack Obama and the Department of Labor introduced a new rule governing overtime pay that may affect your company’s policies and your overall bottom line.
The current salary threshold under which workers must receive overtime pay when working more than 40 hours a week is $23,660, or $455 a week, which is below the poverty threshold for a family of four. The proposed rule would raise the threshold to $50,440, or $970 a week.
The rule would also increase the overtime exemption level for higher compensated employees, excluding managers and executives. The current threshold of $100,000 will increase to $122,148 and will include some secretaries, midlevel managers and executive assistants.
All in all, the new proposal is projected to impact nearly 5 million Americans, including 160,000 Ohioans. What this means to them is the possibility for better work/life balance and a higher living wage if they are salaried workers.
Wages lagging behind
For far too long, Americans have worked harder and harder while their wages remained stagnant. Employees have been taken away from their families, working endless hours without getting paid the overtime they deserve.
National statistics further prove this point:
■ Since 1973, productivity has risen by 74 percent while hourly compensation for the typical employee has increased only 9 percent.
■ The typical employee reports working an average of 47 hours per week.
■ Today, only 8 percent of employees are covered by the salary threshold, compared to 1975, when more than 60 percent were covered.
The fact of the matter is that standards around overtime payments to employees haven’t changed in more than a decade. Furthermore, the salary threshold for overtime pay has changed only twice in the last 40 years.
Adequate overtime pay is not just a matter of a paycheck, but of workplace fairness, equity and overall employee morale. According to the Economic Policy Institute, nearly 80 percent of Americans agree that the income threshold should be higher.
Benefits of higher pay
Updating the salary threshold can 1.) restore the 40-hour workweek and allow more parents to be in their children’s lives; 2.) give families more money to reinvest in our nation’s economy; and 3.) allow managers more flexibility to schedule full- and part-time employees.
As a member of the House Committee on Education and the Workforce and representative of Ohio’s 11th Congressional District, I hear about the need for this update every day from government officials, hardworking employees and company CEOs. While opinions vary on the projected rules, the overall need for an update is clear.
When asked if you looked at your overtime policies recently, many of you probably said no. The federal government hasn’t either. Let’s recommit ourselves to improving all workplace policies and do better for America’s workers. Let’s work together to make our nation’s workforce — especially in Ohio — stronger, more viable and, ultimately, more competitive.
U.S. Rep. Marcia L Fudge represents the 11th Congressional District of Ohio Marcia is serving in her third consecutive term. She was elected in a special election in November 2008 and was re-elected in the general election that was held that same month. In 2012 she was unanimously elected by her colleagues to serve as chairwoman of the Congressional Black Caucus in the 113th Congress.
