Biden’s Proposed Rule Could Boost Your Pay

About 3.6 million more American workers could soon be eligible for overtime pay, according to a new Biden administration proposal . This expansion of overtime eligibility would be the most generous increase in decades. Here’s what you need to know about how overtime works right now, and how this new rule could change your life (and bank account) for the better.

Current situation with overtime pay

Generally speaking, overtime pay applies to hourly employees who work more than 40 hours per week. As we’ve explained before , the ability to pay overtime is one of the few advantages that salaried workers have over salaried workers. (Unfortunately, many salaried or non-hourly workers are also underpaid and overworked, but lack the ability to earn overtime.)

The Biden administration’s proposed rule, released by the Department of Labor (DOL) last week , would give “millions of additional workers the right to overtime protection if they earn less than $55,000 per year” (or less than $1,059 per week). . This salary threshold is an increase from the current minimum of $35,568.

By comparison, about 15% of salaried workers are currently eligible for overtime pay; According to the AP , the proposed rule would effectively double that percentage. This expansion will have a huge impact on all low-wage workers who have long been denied overtime pay despite working long hours and earning the same wages as their hourly counterparts.

How the proposed rule would work

Here’s a more detailed look at exactly what the proposed rule would do, according to the DOL :

• “Restore and expand overtime protections for low-wage workers.” This is the biggest one. Due to outdated and out-of-sync regulations, many low-wage workers do not receive overtime pay like their hourly counterparts. With the new proposed wage levels, more low-wage workers will get the overtime protection they deserve.
• “Give valuable time back to non-exempt, executive, administrative or professional employees.” The proposed rule would protect workers by more clearly defining who is exempt from overtime and who is not.
• “Prevent future erosion of overtime protections and provide greater predictability.” Under the new rule, the salary threshold will be automatically updated every three years to more accurately reflect current earnings data.
• “Restore overtime protections in U.S. territories.” This rule would revert to previous practices that provided a wage threshold for overtime work in U.S. territories where the federal minimum wage applied.

Bottom line

This change could make a big difference if you’re a low-wage worker making less than $55,068. If approved, the new rule would not take effect for several months. We are currently in a 60-day waiting period during which the proposed rule is open for public comment. (The 60-day countdown began Aug. 30.) The Department of Labor says it will review all comments received before publishing the final rule. More information about the proposed rule and instructions for submitting comments can be found here .