The Department of Labor has proposed a significant change in overtime eligibility rules that will make 5 million more workers eligible for overtime, even if they’re salaried employees. If you’re salaried and make between $23,600 and $50,440 a year, you should be paying close attention.
The threshold, which hasn’t been changed since 2004, will increase from $455/week ($23,600/year) to about $970/week ($50,440/year). There are, however, reports that the final threshold will only be $47,000. Regardless, anyone making less than that new threshold will now be eligible for overtime pay. Also, the threshold will automatically increase with inflation, so that it stays relevant to current conditions.
For a sense of how out-of-sync the overtime threshold had become, consider this:
- In 1975, 62% of workers were eligible for overtime pay.
- Today, only 8% of workers, some of them making just $23,600/year, are eligible for overtime.
To better understand the proposal, watch the above video or read more about the proposed rule here. We’ll of course post an update when the rule goes into effect, and you can subscribe to the DOL’s newsletter, which will give you the news even faster.
The only bad news for these 5 million Americans is that they’ll now have to track their time. HourVoice’s HourTracker can help, and you can access it at app.hourvoice.com. No download, no app store, and it doesn’t take up space on your phone.