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News from EPI Giving More Workers the Right to Be Paid Overtime Would Be Family Friendly

Gradually raising the overtime salary threshold to $984 per week ($51,168 per year)—the 1975 threshold adjusted for inflation—would provide millions of workers with overtime protections, with little risk of reducing the flexibility of their work time, a new Economic Policy Institute report finds. In Flexibility and Overtime Among Hourly and Salaried Workers: When You Have Little Flexibility, You Have Little To Lose, EPI research associate Lonnie Golden shows that salaried workers at the pay levels that would be newly covered by an increase in the overtime threshold (less than $50,000) do not have markedly greater levels of work scheduling flexibility than their hourly paid counterparts. As such, there is little danger that making this change would noticeably reduce their work scheduling flexibility.

According to Department of Labor (DOL) regulations, salaried workers are currently exempt from being paid “time-and-a-half” for working overtime if they are paid more than $455 a week—$23,660 a year—even if they are classified as managers, supervisors or administrators. It has become commonplace for workers whose duties are largely or frequently menial and non-managerial to be designated as salaried “assistant managers” and denied any overtime pay, no matter how many hours they work in a given week.

“Unlike highly paid salaried employees, salaried workers who would be affected by lifting the overtime threshold have relatively less flexibility in the timing of their work , which means they have almost none to lose,” said Golden. “On the other hand, these workers have much to gain, including protection from having to work unpaid overtime. Simply put, giving more workers the right to be paid overtime is a benefit with no adverse consequences on employees, and in the longer run, few drawbacks for employers, too.”

Using data from the General Social Survey, Golden finds that salaried workers at lower income levels appear to have no more ability to take time off for personal or family matters than do hourly workers at the same annual earnings levels, and they have about the same or even greater likelihood of having to work mandatory overtime than their hourly counterparts. A shift in the pay threshold would provide the newly eligible workers with greater flexibility to work overtime and get paid for it, and to avoid unwelcome, scheduled overtime work.

Moreover, salaried workers at the affected pay thresholds either report relatively greater work-family conflict and work stress and a greater incidence of mandatory overtime conditions. Raising the overtime salary threshold for them would not increase and in fact could decrease the work stress and work-family conflict associated, particularly with mandatory overtime work.

“Not only would lifting the overtime threshold shield more workers from having to work added hours effectively for free, it could also lessen work-related time conflicts and create a more positive, less stressed workplace,” said Golden. “Making this change, at this time, has almost all upside, so it’s pretty much a no-brainer.”