Economic Snapshot | Overtime

4.7 Million Millennials Would Directly Benefit from Raising the Overtime Salary Threshold to $50,440

In July, the Department of Labor proposed raising the overtime salary threshold from the current $23,660 to $50,440 in 2016. If implemented, this new overtime salary threshold would directly benefit 13.5 million salaried workers, most of whom would gain new rights to overtime eligibility. As the figure below shows, 2.0 million salaried workers between the ages of 16-34 (otherwise known as millennials) are currently covered by the overtime salary threshold. Raising the salary threshold to $50,440 would directly benefit 4.7 million millennials, with most of them gaining new rights to overtime eligibility, and bring the number of millennials covered by the overtime salary threshold to 6.7 million. While millennials represent 28 percent of the total salaried workforce, they would represent 35.2 percent of the 13.5 million salaried workers directly benefiting from the proposed higher overtime threshold. The proposal to raise the salary threshold will therefore disproportionately help younger workers, those entering the years in which they are likely to form new families.

Economic Snapshot

4.7 million millennials would directly benefit from raising the overtime salary threshold to $50,440: Number of workers age 16–34 covered under current and proposed overtime salary threshold, 2014

Currently covered Covered under new threshold
Current threshold 1,960,000
New threshold 1,960,000 4,744,000 
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The sample reflects salaried (nonhourly) workers who are subject to the Fair Labor Standards Act (FLSA). This excludes certain groups of workers such as the self-employed, most federal workers, religious workers, many agricultural workers, and many transportation workers.

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Over the past 15 years, young people have not only experienced stagnating wages but also high levels of unemployment and underemployment. Under the proposed threshold, salaried workers who make less than $50,440 annually would be covered by overtime rules. Most of these workers would be newly eligible for overtime protections—those who have not been eligible have not been getting paid anything extra for their work beyond 40 hours in a week and would be paid at a premium of 1.5 times the hourly rate. Raising the threshold would benefit workers by giving some higher pay for working overtime and others reduced hours without any reduction in pay, allowing them more time for leisure, commuting, family, and friends. As the hours of mid-range salaried employees are reduced, new hourly jobs would also be created and other hourly workers would be given the opportunity to pick up more hours.

Tell the Department of Labor you support raising the overtime salary threshold to $50,440 by submitting your comment on before the comment period closes on September 4.

See related work on Young workers | Overtime

See more work by Lawrence Mishel