Weren’t More White Collar Workers Supposed to Be Eligible for Overtime Pay?

by | September 26, 2017 | Overtime Law, Wage & Hour

You may remember that about a year a half ago, the Department of Labor, under President Obama, issued a rule that was going change what’s called the “salary level” for “white collar” workers. The salary level is part of the federal overtime rules. Those rules basically say: if you’re a white collar worker and you make less than the salary level you should get overtime wages when you work more than forty hours in a week.

The Obama Department of Labor basically wanted to double the salary level from $455 per week (about $23,660 per year) to $913 per week ($47,476 per year). In other words, under the Obama rule, white collar workers who made less than $913 per week ($47,476 per year) would automatically be eligible for overtime pay. Let’s take a second to appreciate that change. It was huge. The Department of Labor estimated it would have guaranteed overtime pay for at least 4 million additional white collar workers.

Under Federal law, white collar workers include workers who are defined as “executive,” “administrative” or “professional” employees. Those are vague terms. They are defined by complex legal tests, which remain contested despite a long history of employment lawsuits. In an earlier post on this blog, Jeremy Heisler provided some insight as to what these terms mean. At bottom, all of this uncertainty means that white collar workers are vulnerable to wage theft.

That’s why the salary level is so important. It’s a clear rule that says a certain group white collar workers should get overtime wages.

Unfortunately, the Obama rule never took effect. And it’s not looking like it will any time soon.

The rule was supposed to start operating on December 1, 2016. But about fifty business groups and twenty-one states[1] filed lawsuits to stop that from happening. On November 22, 2016, a federal court in Texas, placed a temporary hold (called a preliminary injunction) on the Obama rule. Then, on August 31, 2017, that temporary hold essentially became permanent: The same federal court found the Obama rule invalid.

Although the Obama Department of Labor appealed the preliminary injunction ruling, the appellate court never got to decide the appeal. On September 5, 2017, The Department of Labor (now under President Trump) asked for permission to withdraw the appeal. The federal appellate court granted the request the following day.

That just about killed the Obama rule. Now, the Trump administration is taking its own stab at changing the salary level.  On July 26, 2017, the Trump Department of Labor, issued a “Request for Information,” inviting comments on, among other issues, whether to change the salary level. While it’s highly unlikely that the Trump administration will adopt the Obama salary level ($47,476 per year), there’s a decent chance that there will be some increase. After all, the Department of Labor hasn’t changed the salary level since 2004—not even to adjust for inflation. Moreover, the Secretary of Labor, Alexander Acosta, reportedly signaled at his confirmation hearing that he would be willing to raise the salary level from $23,660 per year to about $33,000 per year (i.e. adjusting it for inflation).

For the time being, the salary level remains at $23,660.

But that doesn’t mean white collar workers who make more than $23,660 can’t get overtime. Remember, there are complex legal tests that determine whether workers qualify as “executive,” “administrative” or “professional” employees. Many white collar workers don’t actually meet these tests, meaning they are entitled to overtime wages– even if they make more than $23,660. If you’re a white collar worker, and you think you’re being wrongfully denied overtime, you can reach out to an employment lawyer for advice about how to recover back wages and change your boss’s overtime policies.[1] Did your state sue? Here’s the list of states that sued to block the rule: Nevada, Texas, Alabama, Arizona, Arkansas, Georgia, Indiana, Kansas, Louisiana, Nebraska, Ohio, Oklahoma, South Carolina, Utah, Wisconsin, Kentucky, Iowa, Maine, New Mexico, Mississippi, Michigan.