Overtime Protections to Raise Wages for Millions of Workers
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18 May Overtime Protections to Raise Wages for Millions of Workers

Posted at 10:16h in Department of Labor, Wages by

12.5 Million Americans: the number of people that the Economic Policy Institute (EPI) estimates will be effected by President Obama’s changes to the overtime rule.

Under the direction of President Obama, the U.S. Department of Labor (DOL) will update the threshold for salaried workers who automatically qualify for overtime when they work more than 40 hours a week.

“We’re making more workers eligible for the overtime that you’ve earned. And it’s one of the single most important steps we can take to help grow middle-class wages,” said President Obama.

“New overtime protections mark a major victory for working people that will improve the lives of millions of families across America,” said AFL-CIO President Richard Trumka. “We applaud the Obama Administration heeding the call for action to ensure working people get paid for all the hours we work. Taking this step to restore overtime is one of the many ways we are beginning to change the rules of our economy that are rigged in favor of Wall Street.”

“The fight for even stronger overtime protections and to raise wages for all working people continues. But today, millions of workers will receive a long overdue raise, healthier and more productive jobs, and more time to spend with our community and loved ones,” added Trumka. 

This simple rule change will have a significant impact on our local and national economy. The White House estimates this rule change will put $12 billion dollars into the hands of America’s working families in the next ten years.

Check out the AFL-CIO’s Seven Things You Need to Know About the New Overtime Rules

 Employers have used this low salary threshold to cheat workers out of higher wages for decades. Many of these workers routinely work 50-60 hours a week and are paid a flat rate. In some cases salaried workers were putting in so many extra hours, without any additional pay, that their per-hour rate would drop below the federal minimum wage of $7.25 an hour.

EPI estimates that raising the overtime salary threshold will directly benefit a broad range of working people, including:

  • 6.4 million women, or 50.9 percent of all directly benefiting workers

  • 4.2 million parents and 7.3 million children (under age 18)

  • 1.5 million blacks, and 2.0 million Hispanics

  • 4.5 million millennials, defined as workers age 16 to 34 (who make up 28.2 percent of the salaried workforce but 36.3 percent of directly benefiting workers)

  • 3.6 million workers age 25 to 34 (who make up 22.9 percent of the salaried workforce but 28.7 percent of directly benefiting workers)

  • 3.2 million workers with a high school degree but not more education (who make up 15.5 percent of the salaried workforce but 25.3 percent of directly benefiting workers)

The White House estimates that the new rule is expected to extend overtime protections to 4.2 million more Americans who are not currently eligible under federal law.

The new rule is slated to take effect on December 1st of this year.

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