Topline
The Department of Labor announced the proposal of a new rule on Wednesday that would extend overtime protections to millions of salaried workers making around $55,000, or less, who are currently ineligible.
Key Facts
The proposal would ârestore and extend overtime protections to low-paid salaried workersâ who work more than 40 hour weeks but are ineligible for traditional overtime protectionsâlike receiving time-and-a-half for their workâbecause of âoutdated and out-of-sync rules,â the department said in a press release.
The salary threshold, implemented in the Trump-era, is $35,568, raised from $23,660, according to the Labor department.
The rule states that a salaried employee making more than the set threshold works in a âbona fide executive, administrative, or professional capacityâ and is ineligible for overtime pay.
The proposal would also work to better identify which executive and administrative workers should be exempt, and proposes updates every three years based on earnings data to âprevent a future erosion of overtime protections.â
Overtime protectionsâand enforcement of the federal minimum wageâwould also be restored for people working in U.S. territories who havenât had them since 2019.
Big Number
3.6 million. Thatâs how many workers the Department of Labor estimates would benefit from the new rule if it goes into effect.
Crucial Quote
âIâve heard from workers again and again about working long hours, for no extra pay, all while earning low salaries that donât come anywhere close to compensating them for their sacrifices,â said acting Labor Secretary Julie Su in the release.
Key Background
Back in June 2021, former Secretary of Labor Marty Walsh told lawmakers the department was reviewing its regulations around overtime, but a number of delays pushed the deadline for a proposed rule to this August, HR Dive reported. Raising the threshold for people eligible for overtime pay is something President Joe Biden had tried once before when he was vice president under former President Barack Obama. In 2016, Biden announced the Obama Administrationâs intent to increase the threshold from around $23,000 to nearly $47,500, more than doubling it. But legal challenges ultimately stopped that plan when a Texas-based district court found that the threshold was âset so high it made the job duties piece of the exemption test irrelevant,â Bloomberg Law reported, keeping the threshold at $23,000 until it was raised under former President Donald Trump in 2019.
What To Watch For
Once the proposal is formally published in the Federal Register, there will be a 60-day period for people to comment on the changes. The labor departmentâs proposal, if approved, would likely face legal challenges similar to ones the Obama-era policy faced.