REP. ANTHONY DANIELS: YOU DESERVE MORE OF YOUR OVERTIME PAY

By Alabama State Rep. Anthony Daniels

As we prepare for the 2023 Alabama Legislative Session, I and my Democratic colleagues will be presenting several pro-growth economic bills designed to help hard-working Alabamians prosper and keep more money in their pockets. Our comprehensive economic plan includes ending regressive taxes, ensuring that businesses have the infrastructure and resources they need, and that we create a worker and business-friendly environment that will nurture entrepreneurship and attract high paying jobs to Alabama.

The first bill in our economic plan is about you – you, the worker and you, the business owner.

A common misconception about taxes is that overtime wages are taxed at a higher rate than a worker’s regular hours. The truth is that both are taxed at the same rate, but it definitely feels like much more when that percentage is taken from one and half times the normal rate of pay.

Of course, right now many hard-workingAlabamians are feeling financially squeezed due to rising grocery and gas prices, not to mention state taxes on top of these essentials.

Yet, this is why so many Alabama workers choose to work overtime when they have the opportunity, so that they can offset the rising cost of living. Wouldn’t it help workers and their families put more money in their pockets if we eliminated the state tax on overtime pay? Simply, YES.

Wouldn’t it also benefit employers dealing with the current staffing shortage who need employees willing to put in extra hours to make up for labor shortfalls. YES. In fact, this is a big win for both – employee and employer – and could ease labor shortages in critical areas such as healthcare, as well as manufacturing and retail.

Here’s how it would work: So, let’s say John has a full-time job making $15/hour and gets paid every other week. His usual paycheck is $960, after taxes. Right now, if John was to work 10 hours of overtime, his pay would be $1,140 after taxes. If we take out Alabama’s tax on the 10 hours of overtime pay, John’s check would then be $1,251.25. That’s $111.25 more! Which is more money in John’s pocket to spend on the things that he and his family need.

You deserve more of your overtime pay. Especially, because you chose to go above and beyond for your employer and that extra money will likely be spent locally, benefitting Alabama’s economy. That’s the difference between a “trickle down” economy that favors the wealthiest versus an economy that grows from the bottom up and the middle out.

In Alabama, this is an innovative and practical idea that would bring an immediate economic benefit to workers and their families. During the pandemic, we learned how important it was to give targeted tax breaks, financial incentives, and other types of economic relief as a way to keep local businesses and economies afloat. Although we seem to have weathered the worst of the financial storm brought on by the pandemic, many Alabama families are still struggling to pay basic bills.

Eliminating the state tax on overtime pay would provide a significant and real-time relief for these families. The point is that you deserve to keep more of what you earn.

Whether it’s bolstering workforce training or incentivizing employer provided childcare, we strongly believe that investing in Alabama workers is how we nurture sustainable long-term growth. For too long, we’ve given incentives and breaks to those at the top hoping the economic benefits would “trickle down”, but that seems to have only widened income inequality. That’s why we need a more practical and balanced approach that rewards hard workers like you.

Contact your representative today and let them know that you strongly support eliminating the tax on overtime pay because you deserve more money in your pocket and you want trained and trusted workers to stay on the job.

Together, this is how we build a more prosperous Alabama.

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