Study: Overtime rules could benefit 6M

Regulations now under construction at the Labor Department could expand the sphere of workers eligible for overtime pay by more than 6 million, according to a new study from the Economic Policy Institute (EPI).

Raising the weekly salary threshold under which employers would be obligated to pay their workers overtime wages would disproportionately help female, Latino and black workers, according to the liberal-leaning think tank's new report.

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“Raising the salary threshold for overtime will help low-paid managers and professionals, especially women and people of color, who are not being compensated when they work over 40 hours a week,” said Heidi Shierholz, an economist at the institute who conducted the study.

President Obama ordered up the regulations via executive action this spring, as his push for a national minimum wage hike faltered in Congress.

Under current rules, employers must pay overtime to salaried workers making less than $455 a week. The exemption for those earning more was meant for well-paid executives and professionals but hasn’t been raised.

The EPI has recommended that the threshold be lifted to $984 to reflect inflation since 1975, when the rules were put in place. That would make an estimated 6.1 million more people eligible, Shierholz said.

“It’s clear that the Department of Labor should raise the threshold to $984, or even higher, so that low-paid white-collar workers are treated fairly,” she said.

The Obama administration has not said how high the new regulations might lift the threshold, but the proposal seeks to redefine which employees can be classified as “executive or professional” and thus ineligible for overtime pay.

The action is expected to expand the number of eligible employees to include, for instance, fast food shift supervisors and some office workers who are now denied overtime pay.

Employees would also be required to perform a minimum percentage of “executive work” to qualify for the so-called white-collar exemption, narrowing a loophole that allowed companies to exempt certain workers.

Labor Secretary Tom Perez has declined to say how soon the new rules would be finalized, but a notice of proposed rule-making, the first formal step in the process, is expected in November, according to the agency’s regulatory agenda.