The Biden administration has made a significant move to expand overtime pay eligibility for millions of salaried workers in the U.S. The new rule, set to take effect on July 1, will require employers to pay overtime to salaried workers making less than $43,888 a year in certain roles, with the threshold rising to $58,656 by 2025.
Acting Secretary of Labor Julie Su emphasized the importance of ensuring that lower-paid salaried workers are fairly compensated for their time and work. The new rule represents a major increase from the previous threshold set under the Trump administration in 2019.
The Labor Department estimates that 4 million lower-paid salaried workers and 292,900 higher-compensated workers will become eligible for overtime protections under the new rule. The methodology for updating salary thresholds will be based on the latest wage data and will be adjusted every three years.
While critics have raised concerns about the potential costs and challenges for employers, advocates have praised the administration’s efforts to provide fair compensation for workers. The Economic Policy Institute highlighted the importance of updating the overtime threshold, which has not been properly adjusted for almost 50 years.
Overall, the new rule represents a significant step towards creating a fairer economy and valuing workers’ time and contributions. The Biden administration’s commitment to raising the bar for overtime pay eligibility has been met with both criticism and praise, but ultimately aims to provide greater protections for salaried workers in the U.S.