Economic Snapshot | Overtime

Nearly one-third of salaried workers will be guaranteed overtime under the new rule, but that falls short of the half covered in the mid-1970s

The Department of Labor’s new overtime rule significantly increases the number of salaried workers who qualify for time-and-a-half pay for any hours they work beyond 40 in a week. Far too many salaried workers were not covered by prevailing overtime protections: While nearly half of all salaried workers were covered by the overtime threshold in 1975, that share fell to just 10 percent of salaried workers in 2014. This is because the salary threshold of $23,660 per year—the salary beneath which salaried workers are generally eligible for overtime protections regardless of duties— had not kept up with wage growth or inflation and was far too low.

Economic Snapshot

Nearly one-third of salaried workers will be guaranteed overtime under the new rule, but that falls short of the half covered in the mid-1970s: Share of salaried workforce covered by the federal overtime salary threshold, 1975–2015

Year Share of salaried workforce covered under federal overtime salary threshold
1975 49.6%
1976 45.1%
1977 42.5%
1978 37.2%
1979 39.8%
1980 35.0%
1981 30.0%
1982 26.3%
1983 24.1%
1984 21.3%
1985 19.0%
1986 17.1%
1987 15.2%
1988 13.8%
1989 13.4%
1990 11.8%
1991 10.5%
1992 10.3%
1993 9.9%
1994 10.3%
1995 9.5%
1996 9.0%
1997 8.2%
1998 7.5%
1999 6.6%
2000 5.9%
2001 5.5%
2002 5.2%
2003 4.9%
2004 15.2%
2005 14.5%
2006 13.2%
2007 12.6%
2008 11.7%
2009 11.7%
2010 11.3%
2011 11.3%
2012 10.8%
2013 10.0%
2014 9.9%
2015 32.7% 
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Note: The sample is limited to nonhourly wage and salary workers.

Excludes unpaid workers and self-employed.The count of covered workers exclude most named occupations (teachers, lawyers, judges, and various medical professions) as well as religious workers, who are not subject to the FLSA, but they're included in the count of the salaried workforce. Historical estimates of the share covered are benchmarked to EPI's 2015 estimate. The estimates consider all the workers who directly benefit from the federal salary threshold increase alone, and do not include a subset of salaried California and New York workers already covered by state thresholds higher than the old federal threshold.

Source: EPI analysis of the U.S. Department of Labor's proposed (July 6, 2015) and final (May 18, 2016) rule, "Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees," 29 CFR Part 541; and Current Population Survey Outgoing Rotation Group microdata, various years

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Raising the salary threshold from $23,660 to $47,476 will restore overtime rights to nearly one-third of salaried workers. Under the new rule, salaried employees making less than $47,476 a year must be paid overtime. The restored rule will benefit these workers in many ways—whether by getting paid time-and-a-half for all hours worked over 40 in a week, having their hours scaled back to 40 hours a week while still taking home the same pay, or getting a raise to put them above the salary threshold. This very positive move forward unfortunately does not restore the protections that were available in the mid-1970s when 49.6 percent of salaried workers had overtime protections, 16.6 percentage points greater than what the new rule covers.

See related work on Overtime

See more work by Will Kimball and Lawrence Mishel