Is a secretary or a mid-level office worker a manager? Most people probably wouldn’t think so, but the federal Fair Labor Standards Act begs to differ.
Is a secretary or a mid-level office worker a manager? Most people probably wouldn’t think so, but the federal Fair Labor Standards Act begs to differ.
Right now any salaried worker who makes more than $23,660 a year and whose duties include “the exercise of discretion and independent judgment with respect to matters of significance” qualifies as management. That designation comes at a cost to the worker — those employees are exempt from overtime rules that say anyone else who works more than 40 hours a week is entitled to guaranteed time-and-a-half pay for the extra time.
In 1975, when the income level for overtime eligibility was set (at that time, it was $13,000), 65 percent of salaried workers were entitled to the pay bump. By 2013, according to the White House, the figure had fallen to 12 percent. It is absurd to suggest that 88 percent of the salaried U.S. workforce is made up of managers.
The Obama administration two years ago asked the U.S. Department of Labor to update the regulations, and late last month, the president issued an executive order raising the income ceiling. The new level of $50,440 a year, which will go into effect in 2016, is more realistic.
Like the minimum wage, overtime pay is a matter of basic fairness, and most workers who put in more than a full day’s work deserve extra compensation. Overtime pay rules and the 40-hour work week, introduced in the 1930s as part of President Franklin Roosevelt’s New Deal policies, helped create an era of prosperity in the country.
Thanks to the update, the new overtime rules more accurately reflect the reality of the 2015 economy.