INDIANA – The reason you may feel like you’re earning less for longer hours compared to your parents is that 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. One of the reasons for this is the decrease in overtime pay.
A new study by Bisnar Chase has revealed that the average Indiana employee in the private sector worked approximately 2.2 hours of unpaid overtime per week over 2022 (the national average was 2.1 hours of unpaid overtime). When this figure is applied to the number of exempt workers in the Hoosier State (and based on the median wage), and then annualized, it transpires that Indiana workers are collectively owed $2,834,499,258 in back pay.
- The average Hoosier worked 2.2 hours of unpaid overtime per week over 2022.
- 96% believe that being remunerated for overtime is a basic human right.
- Map showing overtime owed across the country.
Overtime pay may not be a familiar term to many younger generations, but in the past, it was a staple for middle-class workers. Nowadays, a significant portion of employees works 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 of unpaid overtime per week in 2022. This means they are collectively owed $4.4 billion by their employers. In contrast, workers in South Dakota ‘only worked’ 0.3 hours in overtime, resulting in a collective overtime debt of $79 million.
According to managing partner and trial lawyer Brian Chase of Bisnar Chase, the concept of ‘free time’ has drastically changed over the past fifty years. “Free time is now something that is expected to be given up to one’s employer. The recent trend of working from home due to the pandemic has exacerbated the situation, as unpaid overtime has become a widespread and accepted norm.”
The study also uncovered some interesting findings:
1. 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%).
2. Ninety-six percent also believe that being remunerated for overtime is a basic human right.
3. 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.
4. 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.
5. Finally, an overwhelming 79% said if an employer agreed to backdate payments for overtime, that they should receive interest on said payments.
The decline in labor standards, including not receiving overtime pay over the years, could be the cause behind the mass quitting of jobs, referred to as “The Great Resignation” by the media. The pandemic resulted in many workers switching jobs in search of improved work-life balance.
Notes:
- The number of workers per state used in the calculation includes only those who are exempt from receiving overtime.
- The median wage was used to calculate the average hourly rate.
- The overtime figure per person is the hourly rate multiplied by the average overtime worked per year.
- The final figure is the number of exempt workers multiplied by owed overtime per person in 2022.
