Biden administration completes regulation to extend overtime pay to millions more salaried employees

The Biden administration has made a groundbreaking move to expand overtime pay eligibility for millions of salaried workers in the U.S., marking the largest expansion in federal overtime eligibility in decades.

Starting July 1, employers will be required to pay overtime to salaried workers who make less than $43,888 a year in certain executive, administrative, and professional roles, with the threshold set to rise to $58,656 by the start of 2025. This new rule aims to ensure that lower-paid salaried workers are compensated fairly for their time and work, following through on the administration’s promise to raise the bar.

The current overtime eligibility threshold of $35,568, set under the Trump administration in 2019, will see a significant increase under this new rule. Additionally, highly-compensated workers will also see an expansion in overtime eligibility, with the threshold set to increase to $132,964 on July 1 and $151,164 by 2025.

The Labor Department estimates that 4 million lower-paid salary workers and 292,900 higher-compensated workers will become eligible for overtime protections under the new rule. Critics have raised concerns about the potential costs and labor challenges that companies may face, while advocates have praised the move as long overdue.

The new rule, which will update salary thresholds every three years based on the latest wage data, has been met with both criticism and applause. U.S. Rep. Virginia Foxx expressed concerns about the costs for employers, while the Economic Policy Institute hailed the rule as an essential step towards creating a fairer economy.