An Echo Press Editorial: Workers aren't being paid enough for overtime
By the Echo Press Editorial Board
Feeling overworked and underpaid?
You're not alone.
A new study by the Bisnar Chase law firm shows that the average Minnesota employee in the private sector worked approximately 2.3 hours of unpaid overtime per week over 2022 — more than the national average of 2.1 hours.
When this figure is applied to the number of exempt workers in the state (based on the median wage), and then annualized, it shows that Minnesota workers are collectively owed more than $3.6 billion in back pay, according to the study.
Another finding in the study: 96% believe that being compensated for overtime is "a basic human right."
Unfortunately, that right is under siege.
According to the researchers that did the study, the reason you may feel like you're earning less for longer hours compared to your parents is because it's likely the case. Average hourly wages, adjusted for inflation, have declined since the 1970s, while the average number of hours worked has increased.
As a result, American workers are facing underpayment, overwork and stress, the study found. One of the reasons for this is the decrease in overtime pay, researchers said.
Overtime pay may not be a familiar term to many younger generations, but in the past, it was a staple for middle-class workers, the study said. Nowadays, a significant portion of employees work over 40 hours a week without receiving any overtime pay.
Despite laws that are supposed to protect the right to overtime pay, those earning more than $35,000 per year are often misclassified into exempt positions that do not qualify for overtime. This creates a large pool of "free labor" for employers to exploit, leading to increased profits, declining real wages, and a widening income gap, according to Bisnar Chase researchers.
A managing partner and trial lawyer Brian Chase of Bisnar Chase said the concept of "free time" has drastically changed over the past 50 years. “Free time is now something that is expected to be given up to one's employer," Chase said in a news release. "The recent trend of working from home due to the pandemic has exacerbated situation, as unpaid overtime has become a widespread and accepted norm.”
Other insights from the study:
- Employees were asked, hypothetically, if they were interviewing for jobs at two different companies, would they opt for the company that guaranteed overtime pay, or the company that offered more vacation days? Respondents emphatically said they would take overtime pay (70% compared to 30%).
- Perhaps in a sign of the times, with so many layoffs (particularly in the technology sector), employees have greater job insecurity — over a quarter (26%) said they would not bring it up with an employer if they found out that a colleague who does a similar job was being paid for overtime, even if they were not.
- When asked what they would do if they were paid overtime in one lump sum, 53% said they would put the money in savings; 15% said they would invest in the stock market; 10% would pay it into the mortgage, and 6% would either buy a car or try to start their own business.
- An overwhelming 79% said if an employer agreed to backdate payments for overtime, that they should receive interest on said payments.
There's a bigger picture here than overworked and underpaid employees. Researchers say the situation has led to a decline in labor standards and could be the cause behind the mass quitting of jobs that's been referred to as "The Great Resignation." The pandemic was also a factor, the researchers pointed out, because it resulted in many workers switching jobs in search of improved work-life balance.