States’ overtime threshold plans go further than that proposed by the Obama administration; in Washington state has proposed raising the threshold to $79,872 beginning in 2026.
Disappointed by the Trump administration’s inaction on the issue, a number of states are moving to make more workers eligible for mandatory overtime pay.
In the final year of President Obama’s administration, the Department of Labor issued a new rule that would raise the salary threshold at which workers can be exempt from mandatory overtime wages. The proposed rule raised the threshold, which was last raised in 2004, from $23,660 to $47,476.
However, several Republican attorneys general sued to block implementation of the rule and in November 2016 a federal judge agreed that the Obama proposal was an overreach. Although the Obama administration appealed the ruling, the Trump administration abandoned that appeal several months later.
In March, the Trump administration proposed raising the threshold to $35,308. The rule has not yet been finalized but so far it appears to have been warmly received by employer groups, who view it as a middle ground between the status quo and the Obama proposal.
Labor advocates, however, say the Trump proposal falls far short of what is needed and prevents millions of non-management employees from getting paid for overtime hours.
Some state governments agree. In Pennsylvania, Gov. Tom Wolf last year introduced a plan that mirrors the Obama plan, and will gradually increase the threshold to $48,000.
Other states are going further. The Department of Labor in Washington state has proposed raising the threshold to $79,872 beginning in 2026. In Maine, the threshold is currently set at $33,000, but state lawmakers are pushing to increase it to $55,000 by the end of 2022.
In Massachusetts, lawmakers are considering a bill that would also increase the threshold over the next few years: to $35,000 in 2021; $45,000 in 2022; $55,000 in 2023; and $64,000 in 2024.
Commenting on the Massachusetts legislation, the Economic Policy Institute, a left-leaning think tank, said the proposal would simply be restoring the overtime opportunities that existed for workers in the past.
“If the 1975 threshold, which covered nearly 63 percent of the salaried workforce, were simply raised with inflation up to today and projected inflation out to 2024, it would be equal to $1,268 per week—nearly identical to the threshold proposed (in the Massachusetts legislation,” wrote David Cooper of EPI in June.
Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.
Your access to unlimited BenefitsPRO content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
