August 30, 2023
Millions of American workers could soon be entitled to overtime pay under a proposed new rule from the Department of Labor.
How many more? – an estimate 3.6 million workers!
The Biden Administration introduced this proposed rule today that would require employers to pay overtime to salaried workers who are in executive, administrative and professional roles but make less than about $55,068 a year for full time employees ($1,059/week). The current threshold to qualify for overtime for a salaried worker was actually increased to $35,568 by former President Trump in 2019. Prior to that, the threshold was about $23,660. So this would be a significant jump up.
The rule, which still needs to go through a public comment period and wouldn’t take effect for months, would have the biggest impact –according to the Labor Department — on retail, food, hospitality, manufacturing and other industries where many managerial employees would now meet the new threshold.
Under the Fair Labor Standards Act, almost all US hourly workers are entitled to overtime pay after 40 hours a week, at no less than time-and-half their regular rates. But salaried workers who perform executive, administrative or professional roles do not qualify for overtime unless they earn below a certain level.
But this rule is obviously going to get lots of pushback from the business community. In fact, when former President Obama tried to increase the threshold more than 20 states sued and successfully stopped the Department of Labor from implementing the rule back in 2016.
Read more from the Department of Labor here.
