Biden admin aims to expand overtime pay to millions more workers.
The Biden Administration Proposes Extending Overtime Pay to Millions of Workers
The Biden administration has announced a proposed rule that aims to provide overtime pay to an additional 3.6 million salaried workers. This move by the Labor Department would require businesses to pay overtime to white-collar workers earning less than $55,000 annually. Currently, salaried workers earning $35,568 a year are entitled to overtime, so this rule would raise the eligibility threshold by approximately $20,000.
Boosting Economic Security for Workers
This proposed rule covers various types of employees, including salaried, managerial, executive, administrative, and professional workers, who have different federal overtime standards compared to hourly employees. Acting Labor Secretary Julie Hu stated, “Today, the Biden-Harris administration is proposing a rule that would help restore workers’ economic security by giving millions more salaried workers the right to overtime protections if they earn less than $55,000 a year. Workers deserve to continue to share in the economic prosperity of Bidenomics.”
While most hourly employees are already entitled to overtime pay if they work more than 40 hours per week, many salaried white-collar workers are not. This increase in the salary threshold would impact an estimated 3.6 million workers, particularly those in managerial positions within industries like retail.
Furthermore, the proposed rule includes an automatic adjustment of the annual salary threshold every three years to reflect current earnings data.
Opposition and Potential Disappointments
Notably, this proposed rule has faced opposition from businesses concerned about the potential strain on their payrolls amidst the current inflationary challenges. The Associated Builders and Contractors, representing the nonunion construction industry, expressed disappointment, urging the administration to delay changes to the salary threshold until the economic situation stabilizes.
The overtime salary threshold was last updated under the Trump administration in 2019, increasing it from $23,660 to just over $35,000. While this rule may disappoint business groups, it may also fall short of the expectations of some on the Left who had advocated for an even higher threshold for white-collar overtime.
A group of Democratic lawmakers, including Sen. Sherrod Brown, had previously pushed for the threshold to be raised to nearly $83,000 by 2026.
Overall, this proposed rule aims to provide greater economic security for salaried workers and ensure they can benefit from the economic prosperity of the Biden administration.
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