Today, Sen. Tom Harkin (D-IA) and eight co-sponsors introduced legislation to restore overtime protections for low- and mid-wage salaried workers. The Restoring Overtime Pay for Working Americans Act would guarantee overtime pay for millions of salaried workers earning less than $52,000 a year.
Americans are working longer hours and are more productive than ever—yet wages are largely flat or falling. Indeed, the median worker saw a wage increase of just 5.0 percent between 1979 and 2012, despite overall productivity growth of 74.5 percent. One reason Americans’ paychecks are not keeping pace with their productivity is that millions of middle-class and even lower-middle-class workers are working overtime and not getting paid for it. This is because the federal wage and hour law is out of date—and especially the regulation that sets the salary level below which all employees must be paid time-and-a-half for their overtime hours.
Updating overtime rules is one important step in giving Americans the raises they deserve. If the threshold is raised from its current $455 per week ($23,660 annually) to $984 per week ($51,168 per year, the threshold’s 1975 level, adjusted for inflation) millions of salaried workers would be guaranteed the right to overtime pay if they work more than 40 hours in a week.
This bill would go above and beyond the recent announcement by President Obama in strengthening overtime pay regulations. I salute Sen. Harkin for taking up this issue and calling for a reasonable salary level, indexed for inflation, along the lines Jared Bernstein of the Center on Budget and Policy Priorities and I have advocated. Sen. Harkin led the battle in Congress in 2004 to block a set of very detrimental changes the Bush administration made to the overtime rules. While Sen. Harkin was not entirely successful, he did force the Bush Labor Department to issue a final rule that was less damaging than its first proposal. It’s heartening to see that both Sen. Harkin and his colleagues, along with the Obama administration, continue to believe that low and mid-level workers should be paid when they work overtime. If more workers were paid time-and-a-half when they worked overtime, it would boost the economy and show that in America, hard work pays off.