Overtime Up, Minimum Wage Frozen

Dollar Stores Minimum Wage Workers

            New Orleans       The Department of Labor has now issued its final rule for wage and salary levels that define eligibility for overtime payments at time-and-a-half of the hourly wage.  After years of being stuck at a relatively low threshold, the needle moved during the Obama administration, but the even more worker-friendly Biden administration has now moved the bar up significantly.  For salaried workers who routinely work more than forty hours per week, this is potentially huge.  Ironically, as employers try to compensate for these changes benefiting those workers, the unchanged federal minimum wage leaves lower waged workers with a larger gap between their hourly pay and salaried staff.

            Here’s how the numbers work for standard salary workers:

Before July 1, 2024 $684 per week (equivalent to $35,568 per year)
July 1, 2024 $844 per week (equivalent to $43,888 per year)
January 1, 2025 $1,128 per week (equivalent to $58,656 per year)
July 1, 2027, and every 3 years thereafter

To be determined by applying to available data the methodology used to set the salary level in effect at the time of the update.


For those of you trying to keep up at home, let’s express these annual and weekly pay rates in hourly terms.  Now, a salary worker making less than $17.01 an hour would be eligible for overtime.  In July of this year, if she makes less than $21.10 per hour, she could collect overtime for any hours over 80 per pay period.  Starting in seven months at the first of 2025, any worker on salary making less than $28.20 per hour will be eligible for overtime on the same basis.

What will this mean in real life in the workplace is a good question with a bunch of different possible answers.  Obviously, business groups are crying like stuck pigs about all of this and saying it will be the end of their world as we know it, and likely that’s a good thing for abusers.  Yes, I’m thinking about all the stories we heard from Dollar General so-called managers who were making just a penny or two over the current $35,000 plus pay and working 60 and 80 hours per week.  This will be a gold mine for these workers either way it breaks.  If Dollar General moves them up to the minimum to escape overtime, then in less than a year it will almost double their salaries.  If they don’t, then at time-and-a-half for those extra hours they will almost get to the same level.

Some employers will take the first option and raise their salaried folks up to these minimums or pay the piper.  Others will stand pat and police overtime hours more assiduously if they are near these wage borderlines.  At the least, requiring prior approval to authorize any overtime.  Given the increased prevalence of remote and hybrid work, it will be interesting to see what employers devise to keep up with at-home hours now that overtime will be more in play, even for well-paid workers, making $107 thousand now, $132 thousand in July, and $151 thousand in 2025.

This is a huge working- and middle-class wage boost, so hear, hear.  I wish I didn’t mourn that it only increases the gap for service and other workers still stuck, no matter what they are making per hour, with $7.25 setting the federal floor.  We need action there, rather than pious politicians claiming few still make that, when in reality no one should be making that wage and millions still are.