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U.S. Department of Labor Proposes Updates to Overtime Pay Regulations

On July 6, the Department of Labor (DOL) proposed a new rule that would extend overtime protection to more than 5 million white-collar workers. Overtime pay is monetary compensation for time worked over the standard 40 hour workweek. How much (or if) a worker is paid overtime depends on the specific company.

According to the DOL, the proposal is the first step towards ensuring that all American workers receive fair compensation for their time. A
notice posted to the DOL website explains: “A convenience store manager, fast food assistant manager, or some office workers may be expected to work 50 or 60 hours a week or more, making less than the poverty level for a family of four, and not receive a dime of overtime pay.”

The DOL says that overtime laws are due for an update, and have been for some time.  President Franklin Roosevelt signed the Fair Labor Standards Act on June 25, 1938, mandating time and a half overtime pay for anything beyond the standard workweek. In 1975, 62 percent of full-time workers were eligible for overtime pay, compared to only 8 percent today.

This new proposal from the White House would:

- Raise the threshold under which most salaried workers are guaranteed overtime to include those who make a projected $970 a week or $50,440 a year
- Provide greater clarity for workers so they and their employers can determine more easily if they should be receiving overtime pay
- Prevent a future erosion of overtime and ensure greater predictability by automatically updating the salary threshold based on inflation or wage growth over time

Within the first year of implementation, the bill would extend overtime pay and minimum wage to 5 million workers—56 percent of whom are women and 53 percent who have at least a college degree, says the White House.

To learn more about the proposal from the Obama administration, register for one of our webinars on August 31 or September 15.

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