The Biden administration has finalized a new rule aimed at expanding overtime pay eligibility for millions of salaried workers in the United States. This decision, scheduled to take effect on July 1, will require employers to pay overtime to salaried workers earning less than $43,888 annually in specific roles, such as executive, administrative, and professional positions.
Acting Secretary of Labor Julie Su emphasized the need to address disparities where lower-paid salaried workers often work longer hours without additional compensation, signaling a commitment to uphold promises to improve labor standards.
This adjustment marks a notable rise from the previous overtime eligibility threshold established at $35,568 during the Trump administration in 2019. The updated rule seeks to address disparities and guarantee equitable compensation for salaried workers exempt from overtime pay, reflecting the administration’s commitment to enhancing labor standards and fostering economic equity.
Starting July 1, More Salaried Workers in the U.S. Can Get Overtime Pay (Credits: Getty Images)
Notably, the new rule also extends overtime eligibility to highly compensated workers, with the annual threshold set to rise to $132,964 by July 1 and $151,164 by the beginning of 2025. The Labor Department estimates that approximately 4 million lower-paid salaried workers and an additional 292,900 higher-compensated individuals will gain overtime protections under these adjustments.
The Biden administration’s decision to update overtime regulations follows a comprehensive process that included engagement with various stakeholders and consideration of thousands of comments.
Despite criticism from some quarters, including concerns about increased costs for businesses, proponents argue that the regulation is long overdue and essential for creating a fairer economy. The Economic Policy Institute highlights the stagnation of the overtime threshold over almost five decades, leaving many workers without adequate federal protections for their time and labor.
The expansion of overtime eligibility signals a significant step towards addressing labor inequalities and ensuring that workers are fairly compensated for their time and contributions. Advocates view this rule as a crucial milestone in promoting a stronger and more equitable economy, emphasizing the importance of valuing workers’ time and labor fairly.
