The Department of Labor’s Overtime Rule Gives Hardworking Americans a Long Overdue Raise
WASHINGTON– Today, the Committee on Education and the Workforce held a hearing entitled, “The Administration’s Overtime Rule and Its Consequences for Workers, Students, Nonprofits, and Small Businesses.” The hearing focused on the Department of Labor’s (DOL) new rule that strengthens overtime protections for millions of workers nationwide.
An estimated 4.2 million workers will directly benefit from the new overtime rule which raises the salary level under which most salaried workers automatically qualify for overtime pay to $913 per week, or roughly $47,476 per year. The previous level was roughly $23,660 per year, which is below the poverty level for a family of four in 2014. This was woefully out-of-date; covering just 7 percent of the full-time salaried workforce.
During a press conference with Labor Secretary Tom Perez before the hearing, Congressman Bobby Scott (VA-03), Ranking Member of the full committee, said, “The failure to meaningfully update the rule has eviscerated the 40 hour workweek that Congress intended when it passed the Fair Labor Standards Act in 1938. This sensible update to the overtime rule finally brings overtime protections back in line with congressional intent – to ensure that if you work more than 40 hours in a week you get paid extra. This rule will put more money in workers’ pockets, give them more time to spend with their families, and reduce unemployment by creating new jobs.”
Restoring the overtime salary level will reduce income inequality by boosting pay for working families. In addition to the millions of workers who would be newly eligible for overtime, the rule would strengthen overtime protections for 8.9 million more workers who will now face a lower risk of being misclassified as ineligible for overtime pay.
“I’ve urged members of this committee to ignore knee-jerk antipathy to the new rule and instead to deal in substance, as the DOL did in reviews of tens of thousands of comments and listening carefully to stakeholders on all sides of this issue,” said Jared Bernstein, Democratic witness and Senior Fellow at the Center on Budget and Policy Priorities. “We see the results of such compromise in the use of the lowest regional level, the three-year deferral for certain non-profits, and the leaving of the duties test unchanged.
Overtime protections were enacted to prevent workers from being forced to work excessive hours that can negatively impact their health and well-being, and to ensure that working people aren’t robbed of their hard-earned pay. The failure to update the salary level under which most salaried workers are automatically eligible for overtime pay has profoundly diluted the effectiveness of overtime protections. Committee Democrats strongly support the Department’s effort to make these protections meaningful again.
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