Overtime Archives - Talk Poverty https://talkpoverty.org/tag/overtime/ Real People. Real Stories. Real Solutions. Thu, 27 Jun 2019 14:08:06 +0000 en-US hourly 1 https://cdn.talkpoverty.org/content/uploads/2016/02/29205224/tp-logo.png Overtime Archives - Talk Poverty https://talkpoverty.org/tag/overtime/ 32 32 States Are Going Around Trump to Get More Workers Overtime Pay https://talkpoverty.org/2019/06/27/states-trump-overtime-pay/ Thu, 27 Jun 2019 14:07:29 +0000 https://talkpoverty.org/?p=27751 Getting a promotion is usually a cause for celebration. But after Chip Ahlgren was made a general manager at a Jiffy Lube in Washington state, he moved from an hourly position to a salaried one, and was no longer owed overtime pay when he put in more than 40 hours a week. Instead, Ahlgren could be asked to work as many hours as his boss demands for the same $52,000 a year.

These days, he’s putting in around 60 hours a week, even though his contract says he’s supposed to work 50 hours and the payroll system only counts 40 hours a week for the purpose of accruing sick leave. His managers keep giving him more to do. “They just add and add and add,” he said. “There’s no way for us to get everything done.”

While overall his pay is higher than it was when he was hourly thanks to bonuses, those bonuses aren’t guaranteed. In terms of guaranteed pay per hour, he’s making less: He estimates that right now, it averages out to about $8 an hour, whereas the people below him make $16 an hour. And so much intense work has taken a huge toll on him. “It wears you out to work this many hours,” he said. “I’ve blown out my knee, blown out my back. I’m almost on the brink of not being able to survive physically.”

Ahlgren isn’t eligible for overtime pay because the federal threshold of $23,660 to qualify has gone without an update for decades. And without extra overtime pay for his extra hours, he’s just keeping his head above water financially. “I don’t have really enough to survive or go to the doctor or plan for the future or anything like that,” he said.

Ahlgren may be able to look forward to some relief, however. At the beginning of June, the Washington State Department of Labor & Industries released a plan to update its own overtime threshold. It would ensure that any worker in the state who makes less than 2.5 times the minimum wage — by 2026, nearly $80,000 a year — will be owed overtime pay. About 400,000 people like Ahlgren are expected to be affected.

The state of Washington had to take matters into its own hands because efforts to increase the overtime threshold at the federal level have stalled. In 2016, the Obama administration updated federal overtime rules so those making $47,476 or less would be automatically covered, both hourly and salaried. It would have been updated every three years to keep up with wage growth thereafter, likely covering those making $51,000 by early 2020.

But the update was challenged in court and ultimately struck down. Rather than defend the Obama update, the Trump administration first did nothing, and then put forward its own proposed increase to $35,308 without any automatic updates. According to the Economic Policy Institute, it will cover 8.2 million fewer people than the Obama rule would eventually have.

In the wake of Trump’s weak federal action, a number of states have stepped into the breach, because, as with the minimum wage, federal overtime law is just a floor; states and localities can go higher if they choose.

“This is a standard that is really important to the vibrancy of the middle class, and it has dramatically eroded over time,” said Heidi Shierholz, senior economist at the Economic Policy Institute. The minimum wage raises pay and living standards for those at the very bottom, but overtime is “about the lower end of the middle class,” she said. The typical person impacted by it is the front-line supervisor in a fast food restaurant or retail store — a low-level manager who may be asked to put in 60 to 70 hours a week at no additional pay. Updating overtime therefore acts as a “companion standard” to increasing the minimum wage, she said.

Pennsylvania was the first to act when last year Gov. Tom Wolf (D) proposed raising the state’s threshold to $47,892 by 2022 and updating it automatically every three years after that. California and New York have also taken action: California‘s overtime threshold will cover everyone making less than $62,400 by 2023, while New York will raise it to $58,500 in New York City and phase it in at different rates for different parts of the state.

But Washington state has so far gone the furthest. “The Washington announcement is definitely the boldest,” said Paul Sonn, state policy program director at the National Employment Law Project. “It’s a model for how states can take strong action to protect workers from the Trump overtime rollback. We hope it’ll spur more states.”Previously, about two-thirds of the salaried workforce had to be paid overtime when they worked more than 40 hours a week. Washington’s update would cover about 44 percent, Sonn said: “It’s really quite moderate historically because it wouldn’t fully restore overtime pay to the share that had it in the 1970s.”

Federal overtime law is just a floor.

One of the beneficiaries in Washington would be Sidney Kenney. When he started working at a residential service provider for developmentally disabled people in a salaried position, he was told the job would be 9 to 5, Monday through Friday. “Soon you find out that’s not true,” he said. He was required to always be on call, even on weekends, holidays, and vacations. It meant keeping his phone at the ready even when at the movies or in bed. “It changes how you live,” he said.

He once took a vacation to go to a friend’s wedding but found himself having to do work on the way there, during the wedding, and on the way home. Every time he put in those extra hours, he was paid the same. “It builds resentment,” he said. “You’re angry, you feel like you’ve been lied to, feel like you’ve been taken advantage of.”

So, he decided to move to an hourly position instead. “I loved the job I was doing,” he said. “However, I realized it was not a lifestyle I could continue or wanted to continue.” Now he has a set number of hours, and if he has to come in early or stay late, he’s paid for that extra time. “My days off are my days off,” he said. “I still get phone calls from work and I still get some text messages, but I don’t have to answer them.”

“Your time is invaluable,” he noted. “I can plan things, I can enjoy my time. It’s a crazy world and nothing’s promised, so what time I do have I want to enjoy.”

But he thinks if his state’s proposed overtime update goes into effect, almost all of the positions at his job will simply be made hourly to accommodate it. “I would have stayed in the same position if it were hourly,” he noted. “If they were to extend the same position I had … but in an hourly capacity, I would go back to it.”

Ahlgren doesn’t expect that being covered by overtime regulations would reduce his hours. But it will mean extra money for his extra work. “At least I would be able to go to the doctor and take of myself,” he said. “I would be able to plan for a future where I wouldn’t just have to do this forever.”

Other states may soon join in the action. Last week Massachusetts held a hearing on a bill that would increase its threshold to $64,000 by 2026. Colorado’s labor department kicked off a comment process for whether and by how much it should raise its overtime standards, which will continue through Aug. 15. And a bill has been introduced in Maine’s legislature to increase its threshold. There may be others just waiting in the wings: Sonn noted that 16 states filed objections to Trump’s overtime update. “That shows there’s a long list of states that think it’s not enough,” he said. “We may well see them acting in the future.”

Workers in Washington also hope their state can inspire others to act. “So many businesses have built their models around having these free workers,” Kenney noted. “It’s not right, it’s not ethical, and it’s not fair.”

“I’m just hoping more states follow suit,” he said.

]]>
Middle Class Work Deserves Middle Class Wages https://talkpoverty.org/2016/05/18/middle-class-work-deserves-middle-class-wages/ Wed, 18 May 2016 12:15:19 +0000 https://talkpoverty.org/?p=16356 This post was originally published on Medium.

Single mom Elizabeth Paredes is the assistant manager of a sandwich shop in Tucson. She’s paid a flat salary of $24,000 per year. While she routinely puts in 50 or more hours each week, she doesn’t earn a single dime of overtime. That’s because, under outdated rules that govern the overtime eligibility of managers, her employer doesn’t have to pay her for the extra hours she works.

When I was a kid growing up in Buffalo, a job like Elizabeth’s was a well-paying, middle-class job. Being a manager meant being in the middle class. And rightly so. Managers supervise people, open and close the store, handle the money, and make important decisions. They should be able to own a home, raise a family and build a nest egg for retirement.

These were middle-class jobs by design. The blueprint was the Fair Labor Standards Act, which gave most Americans the right to a minimum wage and time-and-a-half pay when they worked more than 40 hours in a week. The Fair Labor Standards Act was the crown jewel of worker protection and helped build the middle class.

But because of both the erosion of the salary threshold over time and concerted policy choices made by the previous administration, that crown jewel has lost its luster. So we’re taking action on behalf of working people like Elizabeth Paredes.

New rule

Today, the Department of Labor announced a significant change to the overtime rule that simply hasn’t been working for working people. In the process, we’re making it simpler for employers to identify which white-collar workers are covered and owed time-and-a-half for work beyond 40 hours in a week.

For decades, the salary threshold under which all white-collar, salaried workers qualify for overtime has failed to keep up with the rising cost of living. In 1975, 62 percent of full-time salaried workers were eligible for overtime protection based on their pay. Today, only 7 percent are eligible under the outdated salary level. The current salary level is so low that it does not effectively identify which white-collar workers are entitled to overtime protection. That is an economy out of balance.

So we’re fixing it. We have more than doubled the salary threshold — lifting it from $23,660 to $47,476 per year. That means some 35 percent of full-time salaried workers, based on their pay, will now be eligible for overtime.

What does this mean?

It means that Elizabeth and other workers like her will finally be entitled to overtime pay. Whether they’re assistant managers at a restaurant or supervisors in the human resources department, white-collar workers who earn below the new salary threshold have their overtime protections restored.

Employers have options for how they respond to the new rule, and they’re likely to do the following:

  • Pay time-and-a-half for overtime work.
  • Raise workers’ salaries above the new threshold.
  • Limit workers’ hours to 40 per week.
  • Some combination of the above.

Who benefits?

Today’s rule change, which takes effect on Dec. 1, will benefit 4.2 million workers, making them newly eligible for overtime protections. It clarifies for another 8.9 million salaried workers that they, too, remain entitled to overtime. Now, millions of these middle-class jobs are more likely to be rewarded with middle-class pay, and the millions of Americans who sacrifice family time to work extra will earn extra. If their employer chooses to send them home instead of paying for the extra hours, then it means extra time for family or other professional pursuits.

If you work full-time in America, you should be able to get by; when you work extra, you should be able to get ahead. That’s the commonsense principle we’re reaffirming today. With today’s update to the overtime rule, Elizabeth Paredes and millions like her will be able to punch their ticket to the middle class.

]]>