Some 3.6 million salaried workers may soon be able to earn overtime pay, according to a new proposal from the Biden administration.
The rule would update the Fair Labor Standards Act to expand overtime eligibility to more people, and ensure salary thresholds that determine overtime access keep up with earnings data.
Currently, overtime pay applies primarily to hourly workers who log more than 40 hours in one week. However, non-hourly professional workers, including executive, managerial, administrative and professional employees, don’t qualify for the bonus pay unless they earn less than $35,568 a year.
The new proposal raises that threshold so non-hourly professionals can earn overtime if they earn less than $55,068 per year, or $1,059 per week.
“For too long, many low-paid salaried workers have been denied overtime pay, even though they often work long hours and perform much of the same work as their hourly counterparts,” said Jessica Looman, principal deputy wage and hour division administrator, in a statement. “This proposed rule would ensure that more workers receive extra pay when they work long hours.”
The change could have a big impact on low-paid salaried workers in retail, food, hospitality, manufacturing and other industries where managerial employees earn less than $55,068.
The rule includes automatic increases to that salary eligibility level every three years to keep pace with the changing labor market and wages. And it also restores overtime access to workers in U.S. territories that are subject to the federal minimum wage.
Roughly 15% of salaried workers are now entitled to overtime pay, the AP reports citing data from the Economic Policy Institute. If the new rule passes, nearly 30% of salaried workers would become eligible for overtime, though that’s far lower than the 60% of salaried workers who were entitled to overtime pay in the 1970s, per the EPI. Since then, the threshold has not kept pace with wage growth, experts say.
Now that the rule is published in the Federal Register, it is open for public comment for 60 days, after which the Labor Department will consider all comments before publishing a final rule.
The proposal is similar to one made during the Obama administration, which aimed to raise the salary eligibility level to $47,000, but it faced strong pushback from business leaders and Republicans and was ultimately blocked in court.
The Trump administration set the current overtime limit of about $35,500, the first time it was raised since 2004.
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