The U.S. Department of Labor (DOL) is proposing to extend federal overtime protections – the right to be paid more when working more than 40 hours of work – to 3.6 million workers. It is great news for workers nationwide. It also demonstrates that once again, the Evergreen State is at the forefront of labor protection.
Overtime Protections: Paying Workers For Their Labor
Overtime pay has long been a staple of the American workforce. It recognizes that workers deserve to be paid based on the work they perform – and should be paid more for going above and beyond. Unfortunately, outdated federal overtime policies often mean workers are frequently expected to work longer hours for little to no extra pay. This is especially true in industries like food service and hospitality, where employees are promoted to salaried “management” positions, but don’t earn extra pay for extra work.
Currently, employees are exempt from overtime pay if they make at least $684 a week, or $35,568 a year, and serve in executive, or management, roles. According to the DOL, the proposed rule change “would guarantee overtime pay for most salaried workers earning less than $1,059 per week, about $55,000 per year.” The proposal follows months of research and is the direct result of the DOL’s outreach to employers, workers, unions, and other stakeholders.
Washington Leads the Way
In Washington State, most workers are entitled to overtime pay, including many who work in salaried positions. That’s because, in 2019, the Washington State Department of Labor and Industries updated its rules to implement a gradual increase in the overtime eligibility threshold. Workers earning less than that threshold qualify for overtime.
“Contrary to popular belief, some salaried employees are entitled to overtime,” states the Washington State DOL in their documents. “Only salaried employees who meet the executive, administrative, and professional definitions – often called “white-collar” jobs – are exempt from overtime.”
This rule change came as the direct result of lobbying by organizations and stakeholders – including EOI – during the 2018 legislative session.
At that time, Policy Director Marilyn Watkins wrote the following about the need to update Washington’s rules:
“Washington State last updated the rules on overtime pay in 1976, deciding then that if you made less than $13,000 annually, you were entitled to overtime – even if you were salaried. That level was equivalent to a 40-hour workweek at 2.7 times minimum wage. At that time, 63 percent of salaried workers nationally qualified for overtime pay.
Unfortunately, the state threshold was not tied to inflation, and hasn’t changed been updated. It’s still $13,000. The federal threshold is $23,660, so supersedes Washington’s – but a minimum wage full-time worker in Washington earns $23,920. Essentially, no salaried worker in Washington qualifies for overtime pay.”
Washington’s 2019 update is bringing that overtime threshold back to its historical standard. The state’s eligibility threshold is expected to reach just over $80,000/year by 2028.
That means that if a worker is a salaried employee – like a manager in a restaurant – and is paid below that threshold, they are entitled to be paid beyond their salary when they clock more than 40 hours. Not only that, but they receive an overtime rate of 1.5 (time-and-a-half), which can be a huge boon to a worker’s take-home. The higher threshold also disincentivizes predatory labor behaviors, like promoting a worker into a management position at a lower salaried rate and expecting them to put in extra hours.
In other words, employers must choose between paying workers appropriately and honoring a 40-hour work week.
Overtime for Some Industries Remains a Question
Washington’s rules don’t address or fix ongoing issues surrounding how to compensate agricultural workers. Debates about overtime in the grueling agricultural industry continue, largely because businesses have worked to avoid paying the higher rate.
Other fields are contending with what it means to pay workers fairly, as well. The gig economy – rideshare apps like Uber and Lyft, as well as delivery services like DoorDash – has thrived on contract labor, which is easier for workers to pick up, but often pays much less than an hourly-wage job. And unlike traditional low-wage industries, like hospitality, DoorDash and Lyft drivers can’t expect higher wages on holidays, weekends, or for working more than 40 hours.
Unfortunately, new labor protections are often met with resistance by employers, who have become accustomed to paying less for workers. Corporations have leaned on contract and temporary workers rather than staffing their businesses with full-time workers to avoid paying for health care or other benefits.
Lawmakers are making strides toward protecting these vulnerable workers, though; in the 2023 legislative session, Washington became the first state to mandate that rideshare drivers receive access to paid family and medical leave.
Hot Union Summer and the Right Moment for Worker Protections
Employees of corporations like Starbucks and Amazon – whose executives receive huge bonuses while full-time workers rely on food stamps to balance their own budgets – have made a clear statement via their organizing and union drives: It is time for workers to reclaim benefits that companies have stripped.
Fifty years ago, working an hourly-wage job was enough to survive, and working a salaried job came with benefits like a pension and affordable healthcare. Now, workers must often string together two or three jobs to make ends meet, while still forgoing necessities like going to the dentist. The weakening of labor unions and emphasis on gig and contract workers has made it harder for regular, working people to survive, let alone thrive. Meanwhile, corporate profits have continued to shoot through the roof as CEOs hoard more wealth than many of us could see in a lifetime.
Workers have had enough – and elected officials are hearing their cry. When states like Washington lead the charge and demonstrate that a healthy economy is one where everyone is paid for their work, national lawmakers can see a better future.
Increasing federal overtime protections is a fantastic proposal from the DOL – let’s hope it’s just the beginning.
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