Landing a promotion is often a cause to celebrate. However, those who land supervisory roles in some industries find that when they move from an hourly post to a salaried position, they lose their access to overtime pay. That means employers start working them for as many hours they can, and workers end up being paid less per hour for all their new responsibilities.
Los Angeles overtime lawyers know this is very often illegal, and workers are encouraged to discuss their concerns with experienced wage and hour attorneys.
This issue is all the more pressing given a new proposal by President Trump’s U.S. Labor Department, setting the salary threshold (the minimum to which all workers are entitled) to $679 weekly, or little more than $35,000 annually as of next year. That might not seem awful, but the effect is that adopting this proposal would leave behind millions of workers behind that would have gotten a boost of overtime protections per regulations that had been finalized by the Obama administration in 2016.
The earlier-proposed rules would have set the threshold at about $47,500. It would have automatically applied to both salaried and hourly workers and it would have been updated every three years in order to keep pace with wage growth, meaning it would have covered anyone earning less than $51,000 as of next year.
Trump paused implementation of those regulations and then repealed them.
Two Federal Overtime Policies, Side-by-Side Comparison
An analysis by the Economic Policy Institute recently revealed that compared to the 2016 proposal compared to the 2019 policy, and what they found was that:
- 8.2 million fewer workers would be entitled to overtime under the 2019 rule versus the 2016 rule.
- Of those 8.2 million employees, more than 3 million would have received new overtime protections about 5 million would have received strengthened OT protections under the 2016 rule.
- Of those 8 million, nearly 3 million are parents of children under 18, more than 4 million are women, 3 million are minorities and nearly 5 million are those without a college degree.
- Because the threshold of the 2019 doesn’t automatically index, the number of workers expected to be affected by this new rule will grow to nearly 12 million over the first decade, if it remains in place.
Annual wage gains of workers will be $1.2 billion less under the 2019 proposal compared to the 2016 rule. This will grow to $1.6 billion in the first decade.
Even when some workers generally earn more an hour after a promotion, largely because of the bonuses they receive, those bonuses aren’t guaranteed. When factoring in guaranteed hourly pay, some supervisors are actually receiving half the hourly rate as their subordinates – for more intense work.
The overtime threshold has been about $23,600 for several decades, leaving many workers unable to go to the doctor, let alone plan for the future.
Where the federal government may have failed, some states are stepping up. Washington State, for instance, is setting its own threshold. Anyone who earns less than twice the minimum wage (roughly $80,000 annually) will be owed overtime pay. That’s soon going to mean 400,000 in that state alone will start getting overtime to which they haven’t been entitled.
California‘s overtime threshold will extend to all workers earning less than $62,400 by 2023.
Contact the employment attorneys at Nassiri Law Group, practicing in Orange County, Riverside and Los Angeles. Call 949.375.4734.
More than eight million workers will be left behind by the Trump overtime proposal, April 8, 2019, Economic Policy Institute