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.
The Labor department proposed a rule on August 30, 2023 that would raise the cut off for salaried … [+]
Key Facts
The proposal would “restore and extend overtime protections to low-paid salaried workers” who work more than 40 hour weeks but are ineligible for traditional overtime protections—like receiving time-and-a-half for their work—because of “outdated and out-of-sync rules,” the department said in a press release.
The rule states that a salaried employee making more than the set threshold works in a “bona fide executive, administrative, or professional capacity” 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 “prevent a future erosion of overtime protections.”
Overtime protections—and enforcement of the federal minimum wage—would also be restored for people working in U.S. territories who haven’t had them since 2019.
Big Number
3.6 million. That’s how many workers the Department of Labor estimates would benefit from the new rule if it goes into effect. By industry, the Labor Department estimates about 627,000 health care professionals could be eligible, along with 320,000 manufacturing workers, 310,000 retail workers and 202,000 people working in education.
Crucial Quote
“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,” 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 Administration’s 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 “set so high it made the job duties piece of the exemption test irrelevant,” 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 department’s proposal, if approved, would likely face legal challenges similar to ones the Obama-era policy faced.
Further Reading
