Millions More Workers Would Get Overtime Pay Under Biden Plan
More than 3 million workers would be newly eligible for overtime pay when they work more than 40 hours a week under a new proposal from the U.S. Department of Labor.
The highly anticipated proposed rule, announced Wednesday, Aug. 30, by the Biden administration, would expand time-and-a-half pay protections to more workers by changing the exemptions to overtime eligibility under the Fair Labor Standards Act, a change that it says will boost workers’ economic security. But business groups already are pushing back on whether it will achieve those goals.
“We are committed to ensuring that all workers are paid fairly for their hard work,” principal deputy wage and hour division administrator Jessica Looman said in a press release on the rule. “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. This proposed rule would ensure that more workers receive extra pay when they work long hours.”
Workers who are salaried, make more than a certain amount of money per year, and work in a “bona fide executive, administrative, or professional capacity” aren’t covered by requirements for employers to pay employees at a time-and-a-half rate for any time they work beyond 40 hours in a week. Employees must meet all three of these factors for the exemption to apply.
The Biden administration proposal would raise the salary piece of the test to ensure workers making less than about $55,000 annually are automatically owed overtime pay, a bump from the current level of $35,568. The threshold would then update every three years. The change is expected to provide an additional 3.6 million workers with the right to time-and-a-half pay whenever they work more than 40 hours a week, according to the DOL.