New Overtime Rules Expected to Benefit Thousands of Marylanders

More than 200,000 Marylanders who until now couldn’t receive overtime pay even when they worked extra hours stand to benefit when new federal rules take effect. The state’s economy will get a boost too, from this long overdue action.

Like the minimum wage, federal rules regarding overtime pay were designed to ensure that people get fair wages for their work. However, the rules for determining who must receive overtime pay when they work more than 40 hours per week has not kept up with rising wages.

Today, someone struggling to make ends meet on a salary of $24,000 per year could be required to work more than full time without any additional compensation if their employer says their position is “managerial, administrative, or professional.” While working a 50-hour week might be reasonable for a well-compensated CEO, it places an unfair burden on working men and women who are getting by on wages just above the federal poverty line.

Working additional hours with no additional pay effectively lowers a worker’s hourly wage and makes it harder for people to get ahead. Working more than the standard 40-hour workweek takes away time that the worker could use to hold a second job, take classes to advance in their career, or have time to care for their family. It makes sense that they should be compensated for this time.

In 2014, President Obama directed the Secretary of Labor to update overtime regulations. Under new rules the Department of Labor announced last week, most people earning up to $47,476 per year will be eligible to earn overtime pay, up from $23,660 today. The salary threshold will be updated every three years.

An estimated 20 percent of Maryland’s salaried workforce, about 233,000 people, could benefit from the new rule when it goes into effect December 1. Employers will have the option of limiting employee hours to 40 hours per week, paying them overtime when they work more than 40 hours, or increasing their salaries above the new threshold.

The change should help the economy as well. Some people will have more money in their pockets to spend at local businesses, and some companies that have been relying on their salaried workers to take on extra work will choose to hire additional staff instead of paying current employees overtime.