Increasing overtime pay for blue collar workers was a hotly contested issue during President Barack Obama’s administration. Donald Trump was not as committed to raising overtime pay as either Obama or Biden. President Joe Biden made increasing overtime one of his critical campaign promises even though the issue went nowhere during the two previous administrations. Now, officials in the United States Department of Labor are making statements that appear to indicate that the Labor Department is re-dedicating itself to amending its regulations under the Fair Labor Standards Act (FLSA) to significantly increase overtime pay for blue collar workers.
The current status of mandatory overtime pay
Federal law requires mandatory overtime for employees who earn an annual compensation of less than $35,568. The DOL regulations specifically state that a worker must be paid 150% of his regular pay for every hour in excess of 40 worked in a normal work week. However, many workers whose compensation falls below the upper limit are not entitled to overtime pay because they perform managerial duties or because they work in categories determined by the Labor Department to be exempt from mandatory overtime regulations.
What DOL officials are saying
Many groups are pushing the Labor Department to raise the limits on overtime pay. Secretary of Labor, Marty Walsh, has said that the threshold for overtime pay will be raised substantially higher than proposals made during President Obama’s term in office. Other officials have said that the mandatory overtime requirement should be set at a level that guarantees that overtime will be paid to workers earning in the 55th percentile of all full-time workers and salaried personnel. The Economic Policy Institute has calculated that this amount would equal an annual income of $73,551 in 2021 and about $82,745 by 2026.
Other possible changes
Changing the income limits on eligibility for overtime pay is only one method of increasing the amount of mandatory overtime. A California congressman has proposed lowering the weekly maximum number of hours to 32. The DOL is also considering changing the definition of exempt and non-exempt employees.
As might be expected, most businesses oppose any increase in the level of mandatory overtime compensation because they fear that any increase will impose significantly more expenses on them.
Solid legal support
Any change in the current regulations, especially if the changes affect definitions and descriptions of exempt categories, will be complex and subject to many different interpretations. Anyone who has questions about overtime eligibility may wish to consult an experienced employment law attorney.