January 2015

Dear Secretary of Labor Thomas Perez:

As labor economists, we applaud President Obama’s directive to you to update the salary threshold for exemption from the Fair Labor Standards Act’s overtime protections.  The threshold has eroded over time and now protects far fewer salaried workers than it did during much of the past.  The media have reported various proposals for how high the threshold should be raised, ranging as low as $42,000 on an annual basis.  We believe a salary threshold of about $50,000 would be justified as a measure of bona fide executive, administrative or professional status and would improve the well-being of the affected employees without harm to the economy.  This level restores the 1975 threshold, adjusted for inflation, a level we view as reasonably balancing the goals of overtime standards and the flexibility intended by the law.

Sincerely,

Jared Bernstein, Center on Budget and Policy Priorities
Richard Freeman, Herbert Ascherman Professor of Economics, Harvard University
Daniel Hamermesh, Professor of Economics, Royal Holloway University of London and Sue Killam Professor Emeritus, University of Texas at Austin
Harry Holzer, Georgetown University
Lawrence Katz, Allison Professor of Economics, Harvard University
Adriana Kugler, Vice-Provost for Faculty and Professor of Public Policy, McCourt School
of Public Policy, Georgetown University
Hon. Ray Marshall, Professor Emeritus, University of Texas and former Secretary of Labor
Lawrence Mishel, President, Economic Policy Institute
Paul Osterman, NTU Professor, MIT Sloan School
Michael Reich, Institute for Research on Labor and Employment, University of California, Berkeley
William M. Rodgers, Rutgers University
Jesse Rothstein, Goldman School of Public Policy, University of California, Berkeley