WASHINGTON -- Senate Democrats want more American workers to be taking home overtime pay.
Echoing a similar move by President Barack Obama, a bill introduced by Sen. Tom Harkin (D-Iowa) and eight other Democrats on Wednesday would make far more Americans eligible for time-and-a-half pay on hours worked beyond 40 in a week. The legislation would accomplish that by limiting the exclusions that have helped carve a growing share of workers out of overtime protections.
"Plain and simple, if you have to work more, you should be paid more," Harkin, chairman of the Senate Committee on Health, Education, Labor and Pensions, said in a statement. Harkin deemed the current rules "out of date."
The Fair Labor Standards Act guarantees a minimum wage and overtime pay for private-sector U.S. workers. But many workers are classified as "exempt" from the law, in part because of a salary threshold for managers and "professional" employees that's currently set at just $455 per week, or $23,660 per year. Salaried workers who earn at least that much money and meet other criteria aren't owed time-and-a-half for overtime, no matter how many hours they work.
The proposal from Democrats would gradually raise that salary threshold all the way to $1,090 per week, or $56,680 a year, and then tie it to an inflation index.
It would also tighten the rules covering what can be considered a worker's "primary" duty on the job. Changes made during George W. Bush's presidency made it easier for employers to classify their workers as managers and thereby exclude them from overtime. The bill would make it harder for employers to declare workers managers if they don't actually spend most of their time managing.
A much larger share of the U.S. workforce used to be guaranteed to be eligible for overtime compared to now. According to Harkin's office, only 12 percent of salaried workers in the U.S. earn below the overtime salary threshold, down from 65 percent in 1975. Democrats' proposal would raise it to roughly 47 percent.
Ross Eisenbrey, vice president of the left-leaning Economic Policy Institute, has projected that raising the salary threshold to $50,000 would benefit about 10 million workers. "An updated overtime rule will not only help employees who work hard get ahead, it will also provide a boost to the economy by putting money into the pockets of workers who are likely to spend it," Eisenbrey wrote.
The Huffington Post published a report last year detailing how retailers -- and, in particular, major dollar store companies like Dollar General -- help keep their labor costs down by cutting workers out of overtime pay. Many store managers told HuffPost they performed very little managerial duties and worked up to 80 hours a week, much of that spent doing manual labor. When they did the math, they were often earning less than $10 per hour.
Earlier this year, Obama announced that he would direct the Labor Department to institute the kind of changes put forth Wednesday by Senate Democrats -- a move that was applauded by labor activists and advocates for low-wage workers. The Labor Department has not yet released its proposal, and the White House did not say where it would set the new salary threshold, which hasn't been raised in more than a decade.
The Senate bill serves as a complement proposal to the president's, though a more concrete one.
"The legislation introduced today by Chairman Harkin and eight of his Senate colleagues sets a strong benchmark for these proposed regulations -- for instance, by restoring the real value of the 1975 overtime salary threshold and linking it to the cost of living in the future," Allison Preiss, a Harkin spokeswoman, said in an email. "Chairman Harkin looks forward to continued work with President Obama and DOL to ensure that all American workers are fairly compensated for their work.”
In the end any such changes will have to come out of the executive branch. Republicans in the House have criticized the reforms proposed by Obama as too onerous on businesses, and they aren't likely to consider legislation that would force employers to pay workers more. So far, the House GOP has declined to bring Democrats' proposal of a $10.10 minimum wage up for a vote.
Speaking on the Senate floor Wednesday morning, Senate Minority Leader Mitch McConnell (R-Ky.) said that Republicans were "quietly assembling a lot of good ideas aimed at helping middle-class Americans deal with the stresses of a modern economy."
McConnell referred specifically to the GOP's own proposed change to wage and hour law, the Working Families Flexibility Act. The bill would allow workers to bank their overtime hours and accept comp time rather than extra pay.
Democrats and organized labor have opposed the bill on the grounds that it would undermine the 40-hour work week and open workers up to coercion from bosses. By not forcing businesses to pay a premium for working employees into overtime, they warn that the legislation would give employers an incentive to stretch the work week beyond 40 hours.
Arthur Delaney contributed reporting.