Millions of U.S. Workers to Receive Overtime Pay for Working Over 40 Hours Weekly
A new rule from the Biden administration will expand overtime pay eligibility to millions of lower-paid salaried workers earning less than $1,128 per week, or $58,656 annually. The rule, which will be phased in over the next several years, aims to ensure that workers are fairly compensated for working more than 40 hours per week.
Previously, only workers making $684 or less each week, or $35,568 annually, were eligible for overtime. Workers who made more than that weren’t eligible for overtime pay if they worked more than 40 hours a week.
The new rule states that only “bona fide” executive, administrative, or professional employees are exempt from the expanded overtime rule. The change would be phased in, with an increase to $43,888 in July and to $58,656 in January 2025. Then, starting in 2027, the threshold would increase every three years using up-to-date wage data to determine new salary levels.
“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 Secretary Julie Su 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,” Su added.
The new rule could result in an additional $1.5 billion in pay for employees, according to an estimate from the Economic Policy Institute.
“The Department of Labor is ensuring that lower-paid salaried workers receive their hard-earned pay or get much-deserved time back with their families,” Wage and Hour Administrator Jessica Looman said in the announcement. “This rule establishes clear, predictable guidance for employers on how to pay employees for overtime hours and provides more economic security to the millions of people working long hours without overtime pay.”
The new rule will be effective July 1.
