Overtime: The Sequel

I don’t know about you, but at Acroprint we are on the edge of our seats. Why? We are waiting for news regarding overtime laws. Need a refresher? Here you go…

Let’s take it all the way back to the beginning – overtime officially was recognized in 1938 when the Fair Labor Standards Act was passed. The bill limited the work week to 44 hours (two years later it was shortened to 40 hours). The concept of overtime was introduced and proposed that all non-exempt employees who work over 40 hours a week would be compensated for their additional hours with time and a half pay. The law has changed some over the years, but the major principles have remained intact.

Where does this leave someone who works on a salary? Well, in 2004 the salary threshold was set at ~$23,000 a year. Meaning if an employee made less than that much money a year, they were entitled to overtime pay when they worked more than 40 hours a week, regardless of their actual job duties. Unfortunately, this overtime threshold has remained unchanged for far too long and is now below the poverty line for a family of four.

That’s why in 2016, it was proposed that the salary threshold get raised. Fair enough, but it didn’t take. Why? Because it doubled to ~$47,000/year. This would mean that any employee making less than $47,000/year would get time and half pay for hours worked beyond their 40 a week. Another tidbit about the new law- in the future it would automatically increase the threshold based on consumer index, and that is what ultimately killed it. Before this officially passed, an injunction was filed. Judges felt that every increase should be subject to a review, not automatic.

So, it was back to the drawing board. The $47,000/year figure has been thrown out and more modest salaries have been considered. In March 2019, the DOL issued an updated statement that proposed employees making less than $35,308 a year will be eligible for overtime pay, and that the salary threshold be evaluated every four years (read the overtime update here).

According to the statement, released on March 7th, the DOL held six listening sessions and reviewed over 200,000 comments pertaining to this issue. There is one thing everyone is agreeing on- the current law definitely is in need of improvements. Surely challenges will remain as it all gets finalized – worker advocates may argue that it still doesn’t go far enough and businesses may be worried about how this will affect their payroll costs.

We will continue to update you as things unfold. In the meantime, what do you think about the current overtime laws, and the potential updates? How will your business be affected?  As you answer these questions, it’s time to ask yourself- do you have the right payroll solution in place? 

As a company that has been dealing with employee time and attendance products for 50 years, we are here to help. With our AcroTime solution, you can do one-single sign to run reports to see who is eligible, and then review and adjust pay rates as needed. The process is so easy and more importantly you will be in compliance with overtime laws without any headache. Contact us today for a demo or price quote. Our top priority is saving you time and money.

What to let the lawmakers know how you feel about the proposal? Share your questions and concerns here before May 7th at 11:59pm.

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