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Originally Posted On: https://www.bestattorney.com/overtime-owed/
American Workers Are Owed $160 billion in Unpaid Overtime, According to the Study.
You may feel like you’re earning less for longer hours compared to your parents 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 face underpayment, overwork, and stress. One of the reasons for this is the decrease in overtime pay.
A new study by Bisnar Chase has revealed that the average American employee in the private sector worked approximately 2.1 hours of unpaid overtime per week over 2022. When this figure is applied to the number of workers in each state (and based on the median wage) and then annualized, American workers are collectively owed $160 billion in back pay.
Overtime pay may not be a familiar term to many younger generations, but it was a staple for middle-class workers in the past. Nowadays, a significant portion of employees work over 40 hours a week without receiving any overtime compensation.
Despite laws that protect the right to overtime pay, those earning above $35k 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.
When broken down by state, it is Marylanders who are working the most for free. The average worker in The Old Line state estimates that they worked 3.5 hours in unpaid overtime per week in 2022.
This means their employers collectively owe them $4.4 billion. In contrast, workers in South Dakota ‘only worked’ 0.3 hours in overtime, resulting in a collective overtime debt of $79 million.
According to Ian Silvers of Bisnar Chase, the concept of ‘free time’ has drastically changed over the past fifty years. “Free time is now something expected to be given to one’s employer. Due to the pandemic, the recent trend of working from home has exacerbated the situation, as unpaid overtime has become a widespread and accepted norm.”
The study also uncovered some interesting findings…
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%).
Ninety-six percent also believe being remunerated for overtime is ‘a basic human right’.
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.
Finally, an overwhelming 79% said if employers agreed to backdate payments for overtime, they should receive interest on said payments.
The decline in labor standards, including not receiving overtime pay over the years, could cause the mass quitting of jobs, referred to as “The Great Resignation” by the media. The pandemic resulted in many workers switching jobs for improved work-life balance.