DOL Expanding Overtime Availability for Salaried Workers

 

 

Musing Over the DOL, Salary Workers, and Overtime

 

 

Effective July 1, 2024, The Department of Labor has finalized a rule that expands overtime eligibility for millions of workers in the U.S.

According to the DOL, the rule’s key provisions are – and I quote:

• Expanding overtime protections to lower-paid salaried workers.
• Giving more workers pay or valuable time back with their family: By better identifying which employees are executive, administrative or professional employees who should be overtime exempt, the final rule ensures that those employees who are not exempt receive time-and-a-half pay when working more than 40 hours in a week or gain more time with their families.
• Providing for regular updates to ensure predictability. The rule establishes regular updates to the salary thresholds every three years to reflect changes in earnings. This protects future erosion of overtime protections so that they do not become less effective over time.”

 

What Does This Mean, Exactly?

 

 

Under older rules, if you made below $35,568 yearly, which is about $17.10 an hour, you were entitled to overtime – or time and a half pay. That amount will rise to $58,656, or $28.20 an hour, by 2025. Therefore, if you make $25.00 an hour under the new rule, are “employed in a bona fide executive, administrative, or professional capacity,” and work more than 40 hours a week, you are now entitled to earn overtime.

***Point of clarification: I estimated the above hourly wages on a 40-hour workweek; however, given we are talking about overtime availability, it’s feasible to use another hour amount for a more reasonable assessment.

 

$35,568/52 = $684.00 weekly.       $684.00/45 = $15.2

When we estimate an average of 45 hours a week, the wage drops from $17.1 to $15.2

Using the same numbers ($17.1 per hour and 45 hours average), $17.1 X 1.5 = $25.65 per hour for overtime

$25.65 X 5 X 52 = $6,669 extra per year in overtime this person is missing out on

 

Again, this is just an estimate, but if you were working more than 40 hours a week on average, it’s important to know you are being taken advantage of and should be compensated. Your time is your time – it is THE most important asset, one you can never get back, and be sure to prioritize it.***

 

Effectively, this rule ensures companies are classifying employees correctly, and, even more importantly, making sure they are compensated fairly, too.

 

Who Does This Rule Affect?

 

 

Those of us in the skilled trades – or, “blue collar,” if you prefer – have long been covered under the Fair Labor Standards Act of 1938 and are paid overtime after 40. The man reason is due to our being paid hourly.

What’s more, that 40-hour calculation has often been contentious, with many employers only paying overtime once 40 hours have accumulated. There is no current law in effect that limits the number of hours a day you can work; in other words, you could work 40 hours straight through and not be paid overtime.

Collective Bargaining Agreements (CBAs), however, often contain language that stipulates working hours – as well as overtime pay. For many, anything over 8 hours a day is considered overtime. Those in professional settings, however, are often lacking worker protection.

This rule change, then, provides roughly 4 million workers with the ability to earn overtime.

Moreover, either the employer pays the worker overtime, or they are now able to go home, work less, and spend more time with their families – as they should. No worker should be required to work more than they are paid, and that includes salaried office workers, too.

 

Feedback For The Proposed Rule

 

Feedback for the DOL rule

 

Back when the rule was proposed (August 2023), the AFL-CIO had this to say about it:

“Employers who do not wish to pay additional overtime will now no longer be able to rely on unpaid overtime, and instead will have to reassess the way they distribute workloads to their employees. Employers instead could take the high road and hire additional staff or promote workers from part-time to full-time status. This allows working people the chance to spend more time with our families, and will give current employees the opportunity to have predictable schedules.”

 

Predictably, the Associated Builder and Contractors (ABC), an open shop (or anti-union) advocacy group, opposed the rule, stating that,

“Virtually all of ABC’s members employ workers who qualify for exempt status, and phase II of the final rule will reclassify huge numbers of these employees as nonexempt,” said Brubeck. “This will disrupt the entire construction industry, specifically harming small businesses, as the rule will greatly restrict employee workplace flexibility in setting schedules and hours, hurting career advancement opportunities.”

 

Allow me to interpret this wonky statement for you: “…the rule will greatly restrict employee workplace flexibility in setting schedules and hours…” means we are upset that we cannot overwork (and underpay) salary workers anymore.

That’s it.

I’ve already highlighted there are no legal restrictions to the number of hours an employee works daily – just a total of 40 for the week; nor is there a specific time during the day when an employee must work, either (i.e. 7 to 3:30, for example).

In other words, there is no restriction of workplace flexibility – EXCEPT WHEN IT IS AFTER 40 HOURS. And if it is after 40 hours, you should not want to exploit your workforce.

Except that is precisely what they have been doing – and want to continue to do.

 

 

Construction Industry Must Compete For Workers

 

That’s A LOT of money JUST from YouTube

 

I’ve said this for a while now, and my warning will only grow in time: the construction industry – a “legacy” industry – MUST take a long look at itself, understand it HAS to compete with other industries for talent, and that necessitates A LOT of work to do. It requires some honest self-reflection, evaluating the numerous opportunities that are out there, and being creative in their recruitment endeavors.

And while organized labor is better poised to tackle this, most in the industry do not even acknowledge the problem exists. What’s more, from my perspective, the industry’s trouble is just beginning. This problem will become much larger in a decade.

For my part, this rule is a step in the right direction, and not just because it could help attract people; it’s a step in the right direction because we should treat our fellow human beings with dignity – and paying them accordingly is a part of that.

No matter what side you are on with this overtime rule, antiquated thinking will not solve the problems ahead. We need fresh thinking, outside-the-box creativity, and, perhaps most importantly, a departure from the “that’s how we’ve always done it” mentality.