BOSTON — Labor rights groups are pressuring the state to require overtime pay for hundreds of thousands of salaried Massachusetts employees who don’t get paid for working extra hours.
A proposal, which was heard by the Joint Committee on Labor and Workforce Development on Tuesday, would set the maximum salary to qualify for overtime pay at $35,000 starting Jan. 1, 2021, and increase it annually until it reaches a plateau of $64,000 in 2024. Following that, the salary threshold would be scaled up or down with wage growth or inflation.
Supporters of the measure note that the state’s current overtime rules for salaried workers — which set the threshold at $4,160 a year — haven’t been updated in more than a half century.
Sen. Jason Lewis, D-Winchester, one of the bill’s primary sponsors, told the panel on Tuesday that the threshold for salaried workers “is so out of date that it’s meaningless.”
“This legislation would move us in the right direction, to a threshold roughly two times minimum wage, for lower-level salaried workers to earn the overtime they deserve,” he said.
The bill, which is backed by labor unions, community organizations and progressive groups, has at least 33 co-sponsors.
Overtime pay in Massachusetts is one and a half times an employee’s normal hourly wage. For example, a worker earning the $12 minimum wage gets paid $18 an hour for overtime.
While wage workers get overtime pay when they work over 40 hours, salaried workers are often required to work 50 or more hours in a week and get nothing extra from their employers, according to the Massachusetts Budget and Policy Center, a fiscal watchdog group. The group estimates at least 435,000 salaried workers would benefit from the proposed changes.
“Many salaried workers currently have to work long hours without being compensated for overtime,” Jeremy Thompson, a MassBudget analyst, wrote in a recent report. “Weak, outdated, and unclear state and federal overtime laws make it easy for employers to require salaried workers to work overtime without paying them more than if they had worked 40 hours.”
Another issue is that the state’s rising minimum wage conflicts with federal and state overtime rules, the report noted.
The federal threshold of $23,660 to qualify for overtime means that any employee who earns less than $455 for a 40-hour workweek automatically qualifies for time-and-a half pay. Under the state’s current $12 per hour minimum wage, however, workers must earn at least $480 for a regular week and as a result don’t qualify for overtime under the federal rules.
“It is effectively impossible for any worker covered by Massachusetts wage and overtime laws to be eligible for overtime under the current salary threshold since it’s illegal in Massachusetts to pay any such worker below $480 for a 40-hour workweek, let alone $455,” Thompson wrote in his report.
The business community is pushing back against the proposed changes, which they say will add to the financial burden of employers.
Chris Carlozzi, Massachusetts director of the National Federation of Independent Business, said increasing overtime will add to the payroll costs of small-business owners, “many of whom are already dealing with the effects of paying higher minimum wages to their hourly workers along with the cost of new mandated benefits.”
On a federal level, the Trump administration is scaling back an Obama-era rule that would have doubled the maximum salary for a worker to qualify for overtime pay.
The 2014 rule would have increased the maximum salary from $23,000 to $47,000, pegging future adjustments to the cost of living.
But a federal judge in Texas invalidated the policy in 2017, ruling that the Labor Department didn’t have the authority to make such a change.
In response to the ruling, Trump’s labor secretary, Alexander Acosta, created a watered-down version of the overtime rules — lifting the salary limit from $23,000 to $35,000 and doing away with the cost-of-living increases. Advocates say that means roughly 2.8 million of the 4 million workers who expected to get overtime benefits won’t receive them.
Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites.