1.3 Million More Workers Eligible For Overtime, But Some Say Rules Fall Short A long-awaited update to federal overtime rules means about 1.3 million workers will be entitled to extra pay when they work more than 40 hours a week. But critics say it doesn't go far enough.

1.3 Million More Workers Eligible For Overtime Pay, But Some Say Rules Fall Short

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ARI SHAPIRO, HOST:

Some people who routinely work more than 40 hours a week will soon earn more money. The Labor Department today expanded the pool of workers eligible for overtime pay by about a million people. It's taken years to reach this point, and, NPR's Yuki Noguchi reports, many say the new rules still don't go far enough.

YUKI NOGUCHI, BYLINE: Chip Ahlgren took over the general manager's role at a Seattle Jiffy Lube last year. He went from making $16 an hour to an annual salary of $52,000 - something that seemed, at least at the time, like a step up. But he says his new store was chronically understaffed. Whatever work others couldn't finish fell to Ahlgren.

CHIP AHLGREN: Yeah, having to run my shop no matter what - got to keep the doors open.

NOGUCHI: He says his work week is usually 65 hours a week but sometimes runs over a hundred hours. But as a salaried manager, under law, he isn't entitled to overtime pay. Ahlgren says given how much he works, he'd earn more if he were paid the hourly minimum wage.

AHLGREN: There's nothing protecting me if I have to work 100 hours a week from that happening, and I don't get any more money.

NOGUCHI: Current federal law says most workers making about $24,000 a year are entitled to overtime pay. In other words, in order to be considered salaried, most workers need to make at least that. But that minimum salary threshold was set in 2004. Nowadays, that $24,000 salary falls below the poverty line for a family of four, and just about everyone agrees that needs updating.

The Obama administration sought to expand the number of workers eligible for overtime pay by raising the salary threshold. It proposed more than doubling it to about $47,000. A Texas judge struck that down. Instead, the Trump Administration issued a new rule, setting the threshold at just over $35,000. As a result, 1.3 million more workers will be eligible to earn overtime, but Heidi Shierholz argues the new rules fall short.

HEIDI SHIERHOLZ: It's a missed opportunity in the sense that millions more could have been helped.

NOGUCHI: Shierholz was chief economist at the Labor Department under Obama. She argues the new minimum salary cutoff won't be automatically updated with inflation, meaning it could be decades before it's reset again.

SHIERHOLZ: So it'll be set at $35,000, and that's it.

NOGUCHI: But employers are pleased with the lower threshold. Nancy Hammer is vice president of regulatory affairs for the Society for Human Resource Management.

NANCY HAMMER: Overall, our feeling is that this is a more workable approach.

NOGUCHI: And, she notes, many employers pay overtime, even if not required by law. Also, a growing number of states have or are looking to set their overtime rules above the new federal requirements. Paul Sonne is state policy director at the National Employment Law Project, a worker advocacy group.

PAUL SONNE: Workers, community groups and elected officials are all mobilizing around it as a paycheck fairness issue. If you're going to put in those long hours away from your community and your family, you should at least be paid for it.

NOGUCHI: New York and California have already adopted new overtime rules that set their salary thresholds at around $50,000. A much longer list of states are considering similar proposals, including Colorado, Washington and Pennsylvania.

Yuki Noguchi, NPR News, Washington.

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