Biden administration rule would make 3.6M more US workers eligible for overtime pay
The Biden administration will propose a new rule today that would make 3.6 million more U.S. workers eligible for overtime pay, reviving an Obama-era policy effort that was ultimately scuttled in court, according to the Associated Press.
The new rule would require employers to pay overtime to so-called white collar workers who make less than $55,000 a year. That’s up from the current threshold of $35,568, which has been in place since 2019 when the Trump administration raised it from $23,660. In another significant change, the rule proposes automatic increases to the salary level each year.
The new rule, which is subject to a public commentary period and wouldn’t take effect for months, would have the biggest impact on retail, food, hospitality, manufacturing, and other industries where many managerial employees meet the new threshold.
It could also face pushback from business groups that mounted a successful legal challenge against similar regulation that Biden announced as vice president during the Obama administration, when he sought to raise the threshold to more than $47,000.
The left-leaning Economic Policy Institute has estimated that about 15% of full-time salaried workers are entitled to overtime pay under the Trump-era policy. That’s compared to more than 60% in the 1970s. Under the new rule, 27% of salaried workers would be entitled to overtime pay because they make less than the threshold, according to the Labor Department.
The National Association of Manufacturers last year warned that it may challenge any expansion of overtime coverage, saying such changes would be disruptive at a time of lingering supply chain and labor supply difficulties.
Under the new rule, some 300,000 more manufacturing workers would be entitled to overtime pay, according to the Labor Department. A similar number of retail workers would be eligible, along with 180,000 hospitality and leisure workers, and 600,000 in the health care and social services sector.
