An estimated 1.3 million low-wage workers could be automatically eligible for overtime pay because of proposed changes, according to the Labor Department. The Bush administration unveiled a proposal Thursday to overhaul federal rules on overtime pay. While the proposal would lift the current ceiling of those who can receive overtime, the proposal could also strip the eligibility of hundreds of thousands of higher-paid workers.
Under the current plan, workers earning up to $8,060 annually are qualified for overtime pay. If Bush’s proposal were accepted, employees earning up to $22,100 a year would automatically qualify. According to The Washington Post, there are 70 million workers who are currently entitled to overtime because they are in hourly jobs or because their jobs are not professional or administrative. Some of the jobs that are currently exempt from receiving overtime include teachers, computer professionals, farm workers, commissioned sales associates or unionized workers.
Bush’s proposal attempts to simplify the tests to determine which jobs qualify for overtime, making changes in job classification for executives, administrators and professionals. If passed, employees who manage a business, direct at least two employees and have hiring and firing responsibilities would be considered exempt from overtime. A worker who holds a large amount of responsibility and has an impact on the operation or finances of the company is also ineligible. The proposal also changes the definition of a “learned professional.” Under the current rules, any job that requires an advanced degree is exempt. Under the proposal, however, workers who acquired skills at technical schools, community colleges and in the military could be classified as a “learned professional.”
In the past, courts have struggled with defining the eligibility of certain jobs because the classification was unclear. In the past decade, federal courts have seen an influx of cases dealing with overtime classifications. Many hope that the proposal will clarify murky distinctions between the eligible and ineligible.
“It’s important for employees to know if they are entitled to overtime and it’s impossible today to know because the rules are so outdated and complex,” Tammy McCutchen, administrator of the Labor Department’s wage and hour division, told The Washington Post.
While Bush’s proposal could clarify the rules and help the Labor Department, every presidential administration since the late 1970s has attempted to revise the overtime rule. The current administration hopes the proposal will be finalized by early 2004. The public has 90 days to comment on the proposal after it is formally introduced.
