A proposed Department of Labor rule change, which should go into effect in 2016, will raise the income threshold for overtime pay. Currently, employers are required to pay workers who make less than $23,660 a year, or $455 a week, time-and-a-half pay for hours worked over forty (40) hours per week. As a result, it is estimated that over 14 million low wage earning workers are denied overtime solely on the basis of their salary. Under the new rule, employees earning less than $50,440, or $970 a week, will qualify for overtime wages.
Current Overtime Threshold Below Poverty Level
In 1975, 65% of salaried workers were below the overtime salary threshold, not because their salaries were terribly low but because the value of the threshold was higher, by 2013, only 11% of workers qualified for overtime protection because of their salary. Yet, because the salary threshold had only been updated once since 1975, it has not kept pace with inflation. As a result, today’s salary threshold is below the poverty level for a family of four.
The new overtime rule will protect workers who are not currently entitled to overtime pay despite working long hours every week simply because the maximum pay threshold is so low. The proposed change, by increasing the salary threshold, will entitle millions of workers to pay consisting of 1.5 times their normal wage for hours worked in excess of 40 hours a week. Therefore, once enacted many workers classified by their employers as administrators, professionals or managers will be entitled to overtime pay as long as their salaries fall below the new $50,440 yearly salary threshold.
If you believe that you have been wrongfully denied overtime pay, please call the New Jersey employment attorneys of Lenzo & Reis, LLC, at 973-845-9922 or email us today for a free case evaluation.