This story has been updated.
Thousands of salaried workers in Connecticut could become eligible for overtime pay under a proposed new rule the U.S. Labor Department filed Wednesday.
Under the rule, employees earning up to $55,068 a year would be eligible to earn the overtime rate — time-and-a-half pay — for hours worked beyond a standard full-time schedule of 40 hours a week. The threshold would adjust every three years to take inflation into account. Currently, only salaried workers making $35,568 or less are eligible for overtime.
Labor advocates have long supported expanding overtime eligibility, and while they applauded the Labor Department’s proposal, some said it didn’t go far enough. But many Connecticut businesses say the change could hurt their bottom line — particularly in a state where operating a business can be more expensive than in other states.
“Connecticut has one of the highest rates of income and wage inequality in the United States, which is a highly inequitable country,” said Lauren Ruth, a researcher with economic policy and child advocacy group Connecticut Voices for Children. The new rule, Ruth said, “would boost the wages of some of our lower and middle income workers and help to narrow that income and wage gap.”
Using state labor data, Ruth estimated that at least 389,000 and likely up to 600,000 working people in Connecticut could become newly eligible for overtime pay under the new rule (if they’re salaried employees, as opposed to hourly). The cohort could include workers in manager-level positions in sectors like manufacturing, property management, social services, early education and food service.
Eric Gjede, vice president for public policy with the Connecticut Business and Industry Association, said, “Employers in Connecticut are already struggling right now with the cost of doing business.” With high health care and energy costs to contend with, Gjede said, businesses were disappointed that the General Assembly didn’t do more to reduce their tax burden during this year’s legislative session.
But the federal Labor Department’s proposed overtime threshold might not have a major effect right away in this state, Gjede said, because so many companies already pay salaried workers more than $55,068. Over time, however, as the threshold adjusts for inflation, the rule could encompass more workers and businesses. “That will just become an additional burden for businesses,” Gjede said. “It’s going to become a bigger and bigger problem every year.”
The proposed rule, which would encompass roughly 3.5 million workers nationally, will be open for public comments for the next several months. Following the commentary period, the Biden administration could enact the rule or make changes based on those recommendations.
“This proposal would ensure that employers have ‘skin in the game’ when they ask these workers to work long hours,” said Heidi Shierholz, president of the Economic Policy Institute, a Washington, D.C. think tank.
The National Employment Law Project, a labor advocacy group, called the proposed rule “modest,” noting that the salary minimum is pegged to the cost of living in one of the nation’s lowest-cost regions. “The modest nature of this proposed rule demonstrates the need for Congress to step up and provide the full measure of overtime protections that workers need,” the organization said in a statement.
An earlier version of this story incorrectly stated that an estimated 389,000 to 600,000 Connecticut workers could become newly eligible for overtime under the proposed rule. Only a portion of that number — those who are currently salaried — would become eligible for overtime pay.