On the Proposed Reform of Federal Overtime Rules

Following is a statement from Christine Owens, executive director of the National Employment Law Project, responding to the U.S. Labor Department’s posting today of proposed regulations updating the nation’s overtime-pay rules:

“For too long, America’s workers have been spending more hours at work but bringing home less pay.  Today, by announcing proposed reforms to make more workers eligible for overtime pay, the Obama administration has taken a crucial step toward remedying decades of neglect in maintaining overtime-pay protections and reversing decades of wage declines that have hammered America’s middle class.

“We applaud the Labor Department’s proposal to raise the overtime salary threshold to $970 per week in 2016, or $50,440 in full-time earnings.  Workers earning less than that would be automatically entitled to time-and-a-half overtime pay when they work more than 40 hours per week.

“The updated threshold level is long overdue.  The current threshold of $455 per week, or $23,660 per year, has fallen badly out of date.  It is so low that workers earning less than the poverty level for a family of four may be excluded from overtime-pay protection.  In addition, far fewer workers are eligible for overtime pay today than in the past.  In 1975, 62 percent of workers earned less than the overtime salary threshold and were therefore automatically eligible for overtime pay; in 2014, only 8 percent of workers fell below the threshold, according to the Economic Policy Institute.  Raising the overtime salary threshold to $970 per week will ensure that at least 44 percent of America’s workers are automatically covered by overtime-pay protections—a share of the salaried workforce that seems entirely consistent with the purpose and goals of the Fair Labor Standards Act’s overtime requirement and its narrow exemptions.

“The Labor Department has opted, at the moment, not to recommend specific changes to the ‘duties tests’ that further define which white-collar employees earning at or above the salary threshold should be exempt, posing instead a series of questions about the adequacy (or not) of the existing tests, especially as measured against this new, higher bright-line threshold.  While we appreciate that doubling the salary threshold will extend overtime-pay protections to millions of currently exempt workers, we are concerned that failure to address the existing tests’ vague definitions, laissez-faire approach to the mix of ‘salaried’ and ‘hourly’ duties required for exempt status, and other shortcomings threatens to deny far too many workers the overtime-pay protections they deserve and the statute contemplates.  As we will address in our comments on the proposed regulation, we believe the case is clear for specific reforms (e.g., clarifying that exempt workers cannot spend more than half their time on non-exempt work).  We urge the Department to adopt appropriate revisions to the duties tests in its final rule.

“Whatever work remains to be done, however, should not obscure what a hugely important step forward the Department has proposed.  We applaud the administration’s persistent efforts to improve jobs and raise wages for America’s workers—through this overtime proposal, its strong support for raising the minimum wage, and its extension of minimum wage and overtime protections to home care workers.  In an era of unrelenting concern about low wages and economic inequality, the Obama administration’s actions demonstrate what government can do when it has the political will and the commitment to put the interests of America’s workers and their families first.”


The National Employment Law Project is a non-partisan, not-for-profit organization that conducts research and advocates on issues affecting low-wage and unemployed workers.  For more about NELP, visit www.nelp.org.

For Immediate Release: June 30, 2015
Contact: Anna Susman, anna.susman@berlinrosen.com, 646-200-5285

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