You would probably assume that people with titles like “manager” or “supervisor” are well-compensated for their efforts. After all, they’ve probably worked hard to earn that title, putting in long hours, perhaps obtaining more education or training to get a promotion.
But all too often, these salaried employees are earning less per hour than the employees they supervise. Consider the two New Jersey gas station managers encountered by the Labor Department’s Wage and Hour Division. Despite typically working 65 hours per week (say 7am to 8pm every weekday), their salary was so low that they weren’t even making the equivalent of the minimum wage.
As part of his vision of opportunity for all, President Obama is committed to making sure hard work is rewarded with fair wages. That’s why he signed a Presidential Memorandum today, directing me and the department to fix this problem by updating the regulations regarding who qualifies for overtime protection.
The Fair Labor Standards Act establishes wage protections, including the right both to the minimum wage and time and a half overtime pay for more than 40 hours of work per week, that are intended to apply to most workers. The law provides for some exceptions, but the exceptions haven’t kept up with our modern economy. These exceptions were originally designed to only apply to well-compensated employees with greater job security, more bargaining power, and higher potential for promotion. So as long as these professionals earned above a certain salary threshold, they were not entitled to overtime.
Unfortunately, that salary threshold has only been updated twice in the last 40 years, so the exception is capturing employees who just don’t make that much. That includes the New Jersey gas station managers, as well as retail, fast food and janitorial workers across the country. The current salary threshold is only $455 — below today’s poverty line for a worker supporting a family of four. So under the current rules, even if you’re poor, you may not qualify for overtime. That doesn’t make sense.
So I was proud to stand with the President at the White House today as he announced this action to build lasting economic security for the middle class and those aspiring to join it.
By updating who qualifies for overtime pay, we are expanding opportunity and making sure hard work pays. Today’s announcement will give millions more people a fair shot at getting ahead, a better chance of realizing their dreams.
Follow Secretary Perez on Twitter as @LaborSec