The Department of Labor Just Gave Millions of Workers Overtime Pay
If you make under $58,656, you will soon be entitled to overtime.
By Paul Blest, More Perfect Union
Millions of U.S. workers are newly eligible to be paid time-and-a-half for working overtime under a rule finalized today by the Biden administration.
The Department of Labor’s new rule expands the threshold for mandatory overtime to all salaried workers making up to $58,656 per year who work more than 40 hours a week. Under the previous rule, employers were only required to pay overtime to certain workers making up to $35,568—well below the median U.S. salary.
The updated threshold, proposed last year, will expand overtime eligibility to more than 3.5 million more workers. Effective July 1, 2024, the salary threshold will increase to $43,888 and again to $58,656 on Jan. 1, 2025. The rule also requires that salary thresholds be automatically updated every three years based on up-to-date wage data.
The updated rule also eliminates a loophole by covering managers and supervisors. Under the previous standard, employers could avoid paying overtime wages by giving lower-level workers fraudulent supervisorial titles like “carpet shampoo manager” or “lead shower door installer.” A study released by the National Bureau of Economic Research found that companies used this tactic to avoid $4 billion in overtime payments.
Today’s changes will face fierce opposition from groups like the National Federation of Independent Businesses (NFIB) and the U.S. Chamber of Commerce, which both submitted comments in opposition.
The Biden administration is attempting to reverse a decades-long shift away from overtime protections. As recently as 1975, more than 60 percent of the American workforce was eligible for time-and-a-half; as of 2022, that number was down to around 13 percent.
“This rule will restore the promise to workers that if you work more than 40 hours in a week, you should be paid more for that time,” Acting Labor Secretary Julie Su said in a statement. “Too often, lower-paid salaried workers are doing the same job as their hourly counterparts but are spending more time away from their families for no additional pay. That is unacceptable.”
The new regulation is likely to face opposition from Republicans and business groups. In 2014, then-President Barack Obama’s Department of Labor increased the threshold to everyone making under $47,000 per year, but after a lawsuit from 21 state attorneys general and business groups, a federal judge in Texas struck that rule down in 2017.
In August, the Chamber of Commerce called the new Labor Department rule “the wrong rulemaking at the wrong time,” and said it “hopes that DOL heeds the comments and input from employers and makes significant changes to its proposal.”
Sen. Bill Cassidy of Louisiana, the ranking Republican on the Senate Health, Education, Labor and Pensions (HELP) Committee, echoed big business in a statement that called the proposal “the exact wrong time for the administration to implement such a drastic increase.”
But labor advocates have applauded the push to restore overtime protections. The AFL-CIO said in August that “for millions of families across our country, access to overtime wages would make an enormous difference.”
For more, see our previous coverage on overtime rules:
The rulemaking process is a laborious one, for anyone showing up to scream, 'hE ShOuLd hAvE DoNe tHiS On dAy oNe!!1!111!' The process is further hobbled when the nomination for the head of the relevant subagency - in this case, David Weil for DOL's Wage & Hour Division - is held up for two years thanks to Senate shenanigans, and finally killed through a cloture vote. Acting Administrator Jessica Looman was finally confirmed in late 2023.
In addition, proposed rules and regulations go through a laborious vetting procedure in-agency before being published in the Federal Register with a required period for public feedback. This one went to the Federal Register in September of last year.
The idea that POTUS comes in 'on Day 1' and declares changes like this by fiat is what MAGAts want and is at odds with how our government works.
@Lillian Moss He didn’t. They’ve been doing pro worker things for quite a while now. Just because it’s an election year doesn’t mean they’ll just do nothing during it. Also this wasn’t Biden, it was the Department of Labor. The NLRB made it so they punish companies engaging in unionbusting well over a year ago.