The Biden administration finalized a new rule on Monday that increases the overtime pay threshold for salary workers, despite a similar rule being struck down by a federal judge during the Obama administration.
Starting on July 1, 2024, the Department of Labor (DOL) is increasing its annual salary threshold for those eligible to receive time-and-a-half pay when working more than 40 hours per week from $35,568 to $43,888, according to an announcement from the DOL. The Obama administration tried to issue a similar rule in 2016, raising the threshold for eligibility for overtime pay to $47,000 per year but was struck down by a federal judge in Texas, who said that the increase was too high and that it included some management workers who are typically exempt from overtime pay protections. (RELATED: Biden Regulators Take Aim At Yet Another Multi-Billion Dollar Deal In Antitrust Crackdown)
“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,” Julie Su, acting secretary of the DOL, said in the announcement. “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 Biden-Harris administration is following through on our promise to raise the bar for workers who help lay the foundation for our economic prosperity.”
A hard day’s work deserves a fair day’s pay. Our new rule will benefit millions of workers, including many who have been working 40+ hours/week without any extra pay, by ensuring they gain overtime protections or a raise in salary or compensation level. https://t.co/ZtFKvh9APd pic.twitter.com/tG5pGh8R5G
— U.S. Department of Labor (@USDOL) April 23, 2024
The rule raises the threshold again on Jan. 1, 2025, to $58,656 and will update every three years according to changes in wage data, according to the announcement. The DOL rule also updates and narrows distinctions on which employees are considered “executive, administrative or professional employees” and are therefore exempt from overtime protections.
The Biden administration has rolled out a number of labor rule changes, including a recent rule from the Equal Employment Opportunity Commission requiring that employers give women time off to have abortions. The National Labor Relations Board (NLRB) has also made it easier for workers to unionize under the Biden administration, issuing a new decision in August 2023 that gives the NLRB discretion to mandate unionization if unfair labor practices are determined to occur at a workplace.
An estimated 4 million workers are going to fall under the threshold increase, according to Reuters. Some states already have a higher threshold than the federal government for overtime pay, including California and New York.
“The Department looks forward to ensuring that millions of workers receive the expanded protections of the rule over the coming months,” the DOL told the Daily Caller News Foundation. “We are focused on ensuring that employers and workers understand these critical protections, which will ensure that lower-paid salaried workers receive fair pay for long hours or get to spend time with their families.”
Many groups submitted comments opposing the DOL rule change when it was first announced last year, such as the trade group HR Policy Association, which criticized the proposal as inhibiting worker flexibility and argued that it will lead to a decrease in “good” entry-level jobs that are often within the proposed threshold. The U.S. Chamber of Commerce similarly criticized the proposal when it was first announced, pointing out that struggling small businesses would have to pay more for labor.
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