As many as one million more workers will soon be eligible for overtime pay, under a rule being considered by the Trump Administration.
The rule change by the Department of Labor would raise the wage threshold for workers to be paid overtime, an increase that all sides agree is long overdue.
Still, the new rule does not go as far as a previous version that was proposed under the Obama Administration, which was delayed by a federal judge.
Here’s what you need to know about the overtime rule.
Federal Standards Determine Who Gets Overtime Pay
In 1938, Congress passed the Fair Labor Standards Act (FLSA). As one of the hallmark pieces of legislation from Franklin D. Roosevelt’s New Deal, the FLSA established employment standards that we now take for granted, including the 40-hour work week and time-and-a-half overtime pay. Still, not all of the FLSA’s mandates apply to all workers. One major exception exists with overtime pay.
Within the context of overtime, the FLSA classifies workers as exempt and non-exempt. Exempt workers are those who are not eligible for overtime pay under the FLSA and typically consist of positions that are executive, administrative or professional in nature. Most “white collar” type of jobs are classified as exempt under the FLSA.
Non-exempt workers can receive overtime pay if they work more than 40 hours in a week. Non-exempt workers are employed in positions that, as a general rule, meet all of the following guidelines:
- They are paid less than $455 per week (this amounts to $23,660 per year),
- Receive compensation that is provided on an hourly basis (i.e. the worker is not salaried), and
- Their jobs do not consist of duties that are typical for exempt employees.