Washington, DC—A new report released today by the Institute for Women’s Policy Research (IWPR) and MomsRising.org finds that working women—especially single mothers, women workers of color, and women working in service and administrative support positions—stand the most to gain from an increase of the overtime salary threshold to $50,440 proposed by the U.S. Department of Labor (DOL) in July 2015. Of the 5.9 million workers who will gain coverage under the new threshold, more than half (3.2 million) of these newly covered workers are women and 2.7 million are men. The report also finds that, of currently exempt women workers, nearly half (44 percent) of single mothers, Black women (46 percent) and Hispanic women (48 percent), and more than three in five (61 percent) women working in service and administrative support occupations, will gain coverage and a chance to earn overtime pay with the new threshold.
IWPR’s analysis finds that as of 2014, 21.5 million workers were exempt from automatic eligibility for overtime pay and could potentially benefit from an increase in the threshold. The group of people who will gain automatic eligibility from the increased threshold are salaried workers earning between $23,660 and $50,440 annually (equivalent to $455 and $970 per week), the old and new thresholds. Among these newly covered workers will be those who routinely work more than 40 hours a week and those who currently never or only occasionally work overtime. Currently, 8.1 million workers are exempt from coverage and regularly work more than 40 hours per week. Of these, 1.4 million will gain automatic eligibility for overtime hours they work with DOL’s proposed threshold increase.
“For those who currently work over 40 hours per week without premium pay, the proposed increase in the overtime salary threshold could make a significant impact on the economic security of these families,” said IWPR President Heidi Hartmann, Ph.D. “Our analysis shows that women workers who are typically the most economically vulnerable to low earnings and high unemployment—single mothers and Black and Hispanic women—are the most likely to gain coverage and have the opportunity to earn more per week in overtime pay under the new rule.”
In addition to quantitative analysis conducted by IWPR, the report also includes stories from MomsRising members who exemplify the women workers most impacted by the proposed increase in the overtime salary threshold. The stories from MomsRising highlight the difficulties faced by many working women, who care for their families while working long hours, often with no financial compensation for the hours above 40 per week.
The report finds that, not only will single mothers and Black and Hispanic women workers gain a disproportionate share of the coverage, these same groups of women stand to gain the most in earnings because they work more overtime hours than other groups. With the new threshold, women on average who work overtime could earn up to an additional $227 per week. Newly covered single mothers who currently work more than 40 hours per week could earn as much as an additional $243 per week if they were to receive premium pay for all their overtime hours. For newly covered Black and Hispanic women working more than 40 hours per week, the new threshold could mean as much as an additional $244 and $254 per week, respectively, if paid the overtime premium for all their overtime hours.
“With the estimated transfer of income to workers resulting from this proposed rule, especially to single mothers and Black and Hispanic women, consumer spending should increase and with it economic growth,” Dr. Hartmann said. “But most importantly, increasing coverage for these women is critical if they are to achieve economic security and increase prosperity for themselves and their families.”
The Institute for Women’s Policy Research (IWPR) is a 501(c)(3) tax-exempt organization that conducts rigorous research and disseminates its findings to address the needs of women and their families, promote public dialogue, and strengthen communities and societies.