- The salary threshold is one way we avoid labeling someone a “manager” while paying them what are clearly non-managerial wages. So you want a threshold well above the median wage, which in our economy tends to be the wage paid to the typical production, nonsupervisory employee, someone who clearly should be paid overtime. When the Ford administration raised the salary threshold in 1975, it was 1.57 times the median wage. When Ross and I did our research, the median wage today was $16.70 per hour. Were we to update that same ratio—1.57 times the median wage—you’d get around $26.20 an hour, $1,050 a week, or $54,536 a year. The administrations $970 per week fits neatly in that ballpark.
- Earlier analysis by policy makers who still understood the intent of the FLSA argued that the salary threshold should be “considerably higher” than the level of newly hired “college graduates just starting on their working careers.” The 1950 rule set the level 25 percent above the college entry-level wage; applying that same ratio today would yield a salary of $1,000 a week, again, in the ballpark of the president’s new rule.
- The Bureau of Labor Statistics publishes data on supervisory workers by occupation and median weekly earnings (bona fide supervisors should typically be exempt from OT). For management occupations, the BLS breaks out four levels of supervisory responsibilities, and the median weekly earnings range from $1,520 to $3,995. In other words, by this metric, the new threshold is well below a level associated with supervisory, and presumably exempt, duties on the job.
- BLS grades the responsibilities of occupations by a metric they call “leveling factors” (scores given to each occupation based on its demands for skill, knowledge, and responsibilities). They find the hourly wage of about $24 ($970/40) to be consistently below level 7 (out of 15), fully consistent with nonsupervisory responsibilities.
Right now, too many Americans are working long days for less pay than they deserve. That’s partly because we’ve failed to update overtime regulations for years — and an exemption meant for highly paid, white collar employees now leaves out workers making as little as $23,660 a year — no matter how many hours they work.This week, I’ll [present] my plan to extend overtime protections to nearly 5 million workers in 2016, covering all salaried workers making up to about $50,400 next year. That’s good for workers who want fair pay, and it’s good for business owners who are already paying their employees what they deserve — since those who are doing right by their employees are undercut by competitors who aren’t.