- The Department of Labor proposed a new rule that would update who's eligible for overtime.
- Currently, workers making under about $36,000 can get extra pay for extra hours.
The Biden administration's labor department wants to make sure you get paid for extra hours you're working — even if you're in a salaried position.
Under the Department of Labor's new proposed rule, salaried workers who make less than $55,000 a year, or $1,059 a week, will become eligible for overtime. Currently, that threshold stands at $35,568 a year, or $684 a week, a Trump-era adjustment from $455 a week. The DOL estimates that the rule will make 3.6 million salaried workers eligible for overtime protections. The threshold would also get automatically updated every three years based on workers' earnings.
"The current salary threshold beneath which all workers are entitled to overtime is pitifully low," Judy Conti, government affairs director at the National Employment Law Project, told Insider. There are complex tests that employers have to use to determine if an employee earning above $35,568 should be eligible for overtime, Conti said, such as whether they're performing work that requires advanced knowledge or imagination. One study found that some firms give out fake manager titles to try and avoid paying their workers overtime.
That means that the salary threshold is "the clearest, easiest way for both workers and employers to determine who should be paid overtime and who should not," according to Conti — making it particularly significant that the DOL is stepping in to raise it.
"For over 80 years, a cornerstone of workers' rights in this country is the right to a 40-hour workweek, the promise that you get to go home after 40 hours or you get higher pay for each extra hour that you spend laboring away from your loved ones," Acting Labor Secretary Julie Su said in a statement. "I've heard from workers again and again about working long hours, for no extra pay, all while earning low salaries that don't come anywhere close to compensating them for their sacrifices."
Currently, full-time workers earn median weekly wages of $1,100, according to the Bureau of Labor Statistics. That means a sizable chunk would be eligible for overtime pay under the new $1,059 weekly threshold. Higher thresholds might also benefit historically disadvantaged populations: Women earn a median $993 a week, and median Black and Hispanic workers both earn below the new $1,059 proposed threshold.
It's not the first time that a Democratic administration has targeted the overtime threshold. President Barack Obama attempted to raise the cut-off in 2016, aiming for $47,476, but that was ultimately blocked by a federal judge over states' concerns that the new threshold would increase their costs. The DOL's latest proposal is not a done deal yet; a comment period will be open for 60 days, with hopes that the rule will be finalized by April 2024, according to Conti.
For workers under that new threshold, a final implementation will mean one of two things, Conti said.
"If their employers want to keep working them more hours than 40, they're going to get more money," Conti said. "Or, if their employers don't want to pay them more money, then these workers are only going to work 40 hours a week — and they're going to get their lives back."