Subcommittee Hearing Examines Proposed Overtime Time Rule
Scott and Committee Democrats voice support for proposed overtime rule that would give workers fair day’s pay for fair day’s work
WASHINGTON – Today, the Subcommittee on Workforce Protections held a hearing on “Examining the Costs and Consequences of the Administration’s Overtime Proposal.” The hearing addressed the U.S. Department of Labor’s responsible effort to update and strengthen the federal regulations determining which workers receive overtime pay.
The Department of Labor’s proposed overtime rule would:
· Raise the salary threshold below which workers must receive overtime pay when they work more than 40 hours in a week. The current salary threshold is $23,660—the proposed rule would raise it to $50,440.
· Put more money in the pockets of millions of workers who will be newly eligible for overtime pay.
· Make it easier for businesses and employers to accurately classify workers.
· Update the salary threshold to keep pace with our changing economy.
“Over the past 40 years, the salary threshold has only been updated twice,” said full Committee Ranking Member Bobby Scott (D-VA). “Today, less than 10 percent of workers fall under the salary threshold, in comparison to 1975, when over 50 percent of the workforce did. Updating the existing rule is necessary and long overdue. The rule will benefit millions of workers and make a real impact on the growing problem of income inequality in America. I strongly support the Department’s effort to increase the number of workers eligible for overtime pay.”
From 1948–1973, productivity and hourly wages grew at the same rate. In the 40 years between 1973 and 2013, worker productivity increased by 75 percent, while hourly compensation for the typical worker rose just over nine percent. One reason for the gap between the growth in productivity and wages is that many more workers today are working overtime, but are not being paid for it. Ranking Member Scott and nearly 150 Democrats across both chambers of Congress, sent a letter to President Obama earlier this week in support of the Department’s proposed rule. The members stated that the rule would “increase the number of workers eligible for overtime pay by five million, covering 40 percent of American salaried workers.”
“On the eve of the passage of the Fair Labor Standards Act, President Franklin D. Roosevelt made a powerful declaration that all Americans deserve a fair day’s pay for a fair day’s work. This simple principle is the foundation of the historic labor law that we, as members of the Workforce Protections Subcommittee, are charged with strengthening and defending,” said Rep. Frederica S. Wilson (FL-24). “Unfortunately, the failure to update the overtime salary threshold to reflect the economic realities of today has seriously eroded the promise of a fair day’s pay for a fair day’s work. The Department of Labor’s proposed rule offers protections that would mean so much in the daily lives of millions of Americans and would encourage employers to hire more workers, instead of overworking a few, meaning more jobs for more Americans.”
Ross Eisenbrey, Vice President, Economic Policy Institute testified before the Subcommittee. Eisenbrey emphasized the importance of the proposed overtime rule to middle-class workers and their families.
“The federal government should be using every tool at its disposal to help lift the wages of America’s middle class and working class,” stated Eisenbrey. “Raising the salary threshold used to determine overtime eligibility is an action entirely within the administration’s authority, one that can both lift wages and free up time for overworked middle-class Americans. This change will extend overtime protection to at the very least 7 million—and almost certainly a much higher number—of workers who do not currently enjoy overtime protection, and will clarify and thereby strengthen protection for the remaining workers who earn below the proposed threshold and already enjoy overtime protection currently.”
Testimony of Ross Eisenbrey can be found here.
More information on the Department’s proposed overtime rule can be found here.
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