Risk & Compliance

DOL Proposes Expanding Overtime

The proposal would make more than 1 million workers eligible for benefits.
DOL Proposes Expanding Overtime

The Labor Department has proposed raising the threshold under which workers are entitled to mandatory overtime pay, whenever their workweek exceeds 40 hours, to $35,308.

Under current rules, the threshold is $23,660 a year. The change would extend overtime eligibility to 1.1 million additional workers, the Labor Department said.

A Better Way to Do Ecommerce

A Better Way to Do Ecommerce

Learn how Precision Medical leveraged OneWorld to cut the cost of billing in half and added $2.5M in annual revenue.

The $23,660 threshold was set in 2004.

“At my confirmation hearings, I committed to an update of the 2004 overtime threshold,” Labor Secretary Alexander Acosta said in a written statement, “and today’s proposal would bring common sense, consistency, and higher wages to working Americans.”

In 2016, the Labor Department raised the salary threshold to about $47,000, which would have extended mandatory overtime pay to about 4 million U.S. workers, but business groups and 21 Republican-led states sued to challenge that rule.

Daniel Zhao, a senior economist at Glassdor, said expanding eligibility would likely improve wage growth for low-wage workers. “Over the past year, we’ve actually seen minimum wage increases translate into very healthy pay growth — over 5 percent — for low-wage workers like cashiers, bank tellers, and baristas,” he said.

The Labor Department said the proposal was informed by extensive public input in response for a request for information in 2017. It said 200,000 comments were submitted.

The threshold would not change automatically with inflation. The new eligibility criteria would go into effect in 2020.

Harry Holzer, a professor of public policy at Georgetown University, said the new proposal was a compromise.

“I think those in the business community are going to accept it as a compromise — the best they can do — and Democrats will feel it’s certainly better than nothing.”

Heidi Shierholz, the chief economist at the department under President Barack Obama, said, “This administration is effectively turning its back on millions of workers. Trump and his cabinet are again siding with corporate interests over those of working people.”

4 Powerful Communication Strategies for Your Next Board Meeting