A Fair Day’s Pay for a Fair Day’s Work

Ah summertime. Warm porch nights. Scrumptious garden vegetables. Maybe a vacation. When our girls were little, vacation time for us meant gathering stuff that we needed desperately to get rid of and holding a yard sale. This was great incentive for the girls: create spending money out of toys and clothes you don’t want or need. Their mama loved it even more. Any excuse for the girls to de-clutter was worth the pain of gathering, pricing, and selling our junk.

Not a family to be frivolous with time or vacation money, my husband would chip in his contribution: work a few hours overtime for extra money. That was a win-win proposition—he got more work done and projects finished, alleviating pressures from his stressful job while providing us extra money to spend.

I now realize that my husband’s choice of overtime work/pay when he needed it was a luxury most Americans do not enjoy. In the bubble of my perfect world, I thought the Fair Labor Standards Act of 1938 gave workers the right to work a 40 hour week or not and choose/accept overtime as it was needed with compensation in some form for that extra work, be it time off (comp time) or overtime pay.

I was wrong.

Recently President Barack Obama iterated promises from his State of the Union Address by announcing new proposed standards for the Department of Labor. These standards are to update the ones set in the 1938 Act, then tweaked in 1975, and finally changed drastically in 2004 by the Bush Administration, causing millions of Americans to lose their overtime pay.

The threshold set in 2004 still holds today. Make $23,660 (still well below the threshold of poverty for a family of four) and be given a title of manager, and you pretty much can be asked to work as many hours in the week as humanly possible with no extra compensation or time off. Nada. Zip. Because you are a “manager.” For many businesses, the ride has been like a gravy train. Why pay for two workers for 80 hours in a week if a company can slap the title of manager on one person and force him or her to work double time?

For the past century, the 40-hour workweek has been a cornerstone for American workers. Even with 40 hours, people struggle to balance jobs and family. When overtime hours are thrown in, the struggle intensifies. I well remember my husband’s late nights, his missing soccer games and school performances. But, at least he was compensated. That alone took the pressure off and lessened the sting of missing his girls’ events.

The new regulations will raise the threshold to $50,400 per year as of 2016, extending overtime pay to 5 million workers within the first year. (Of these workers, 56% are women and 53% have at least a college degree.) In addition, the new rules clarify for employers and workers alike which job descriptions are eligible for overtime pay and prevent future erosion of overtime by updating the threshold based on inflation and wage growth over time. This figure also represents the 1975 standard with inflation adjustments.

Many companies have already been paying their employees fairly, so little for them will change. Others will proclaim these standards as business killers, and that is unfortunate. What is more unfortunate is building a successful business on the backs of unpaid labor.

The cornerstone of a sound economic policy for the US includes fairness and decent compensation for middle class workers. A fair wage for a fair day’s work. Such a simple concept but illusive to so many.