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Biden team proposes expanding overtime

Aug 25, 2023

The Biden administration wants to give 3.6 million workers access to overtime pay.

Under proposed changes from the Department of Labor, any salaried employee making less than $55,000 per year, or $1,059 per week, would be eligible for overtime. That would be a significant jump from the current cutoff at $35,568 per year.

“I’ve heard from workers again and again about working long hours, for no extra pay, all while earning low salaries that don’t come anywhere close to compensating them for their sacrifices,” Acting Labor Secretary Julie Su said in a statement.

Under current laws, hourly workers are automatically due time-and-a-half pay when they put in more than 40 hours a week. But salaried workers can only receive the same overtime pay if they earn less than $35,358 per year.

From 2004 to 2019, the cutoff was all the way down at $23,660 per year. The Obama administration attempted to raise it to $47,476, but the move was struck down in court.

In 2019, the Trump administration set the number at $35,568 as a compromise. An estimated 15% of salaried workers are covered by that regulation, a number that would increase to 27% under the new rule. However, even the new mandate would lag way behind the 1970s, when an estimated 60% of salaried workers were eligible for overtime.

“We are committed to ensuring that all workers are paid fairly for their hard work,” said Jessica Looman, the Labor Department’s Principal Deputy Wage and Hour Division Administrator. “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.”

The Biden administration also wants to update the salary threshold every three years to keep up with inflation.

The Labor Department said 600,000 health care and social services employees, 300,000 manufacturing workers, 300,000 retail workers and 180,000 hospitality employees would be covered by the new overtime standard.

The proposed rule is subject to a 60-day public comment period before it can take effect. Business interests are expected to challenge the decision, as they did with the Obama administration’s attempt.

“Public input is essential as we consider the needs of today’s workforce and industry demands, and we encourage continued stakeholder input during the public comment period,” Looman said.

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