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Advice / Succeeding at Work / Money

You Might Be Eligible for a Lot of Overtime Pay According to This New Regulation

person working late

Do you work more than 40 hours a week? Yes? Next question: Are you paid less than $47,477? Also yes? Great, I have some pretty amazing news for you.

The Department of Labor announced a new regulation this week requiring that “most salaried workers earning up to $47,476 a year must receive time-and-a-half overtime pay when they work more than 40 hours during a week.”

The news of the regulation is pretty major and is sure to impact a lot of people. In 2004, the overtime clause applied only to people making $23,660 or less. Until now, if you made over that amount, and your boss had you working 60 or 70 hours a week, that was just the name of the game.

Now, however, overworked and underpaid employees at companies across the nation must be doing jumping jacks! Popping champagne! Booking expensive vacations! (Or, for the more responsible among us, thinking about how this will impact their 401K.)

On December 1, the rule will go into effect, and many workers who put in extra hours will receive more money in their paycheck, which will likely make those long hours more digestible. Of course, some organizations will simply reduce hours so that they don’t have to pay overtime, but I imagine plenty of professionals would be just fine with that.

As of right now, a paltry 7% of salaried workers received overtime pay. But by the time the law is put into play, the Labor Department estimates that some “4.2 million workers will become newly eligible for overtime.”

It’s not quite crystal clear who exactly will be eligible, though there are two ways that the federal law determines eligibility. The first is a duties test. The Times article reports that “bona fide executives, administrators, or professionals” who have historically spent time making decisions and acting as an authority won’t get the overtime pay based on typical duties. The other rule is with regards to salary. You can be a manager (no doubt exercising some authority) making $45K, but if you’re working 50 hours a week, you should qualify for the overtime pay.

Hard-working professionals across all industries, are you rejoicing yet? It’s one thing to accept a starting salary of $42K, for example, and work to earn that money in 40(ish) hours a week, but if you regularly put in a lot more hours per week, at least now you’ll get compensated for them.

Of course, this assumes your employer follows this new regulation. If, after December 1, you think your company’s breaking the law, don’t jump to conclusions and threaten to sue (a threat of lawsuit never a really great idea). First make sure you understand the situation. Muse Counsel Eric Kluger recommends gathering all the information you can to determine if you are eligible for the overtime—the U.S. Department of Labor's website or your state's labor website are good places to start, and each often has a hotline—and if you believe that you're being paid unfairly based on your findings, speak with a lawyer or approach your company's HR department with your concerns. The option to file a complaint with the Labor Department is an option as well, but it's probably not the first step you want to take.

Hopefully, you don't find yourself wondering about unfair payment practices. The law’s an important step in ensuring that companies don’t take advantage of their employees—and that the middle class is taken care of. If you’re regularly exalted for “being the first one in and first one out,” wouldn’t you like some real money to go with the verbal praise?