Eligibility for Overtime Pay Increase: The US Department of Labor will announce a new final rule that revises the salary threshold at which employees are entitled to overtime compensation for weekly work exceeding 40 hours. 4.3 million employees nationwide are anticipated to benefit from the two-step adjustment.
“Salaried employees who are underpaid frequently perform the same duties as their hourly counterparts but have to work longer hours away from their families without receiving additional compensation.”
“That is unacceptable,” a statement from acting secretary Julie Su read. “The Biden-Harris administration is honoring its commitment to improve working conditions for those who contribute to the nation’s economic growth by setting higher standards.”
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Who is eligible for the increase in overtime pay?
At the present time, individuals employed on a salaried basis who earn an annual salary of $35,568 or less are qualified to receive overtime compensation. Since establishing this level in 2019, above-average inflation has caused the United States to endure a period that eroded overtime protections for approximately one million individuals, leaving them without such coverage.
Enforcement of the initial threshold increase will begin on July 1, 2024, in accordance with the revised final rule. As a result, we will grant overtime protections to salaried employees who earn less than $844 per week, or $43,888 annually. The second increase will occur on January 1, 2025, when the threshold nearly doubles from its 2019 level to $1,128 per week, or $58,656 annually.
Subsequently, we shall automatically update the salary threshold every three years in accordance with the most recent compensation data.
Wage and Hour Administrator Jessica Looman stated, “This rule provides more economic security to the millions of people working long hours without overtime pay and establishes clear, predictable guidance for employers on how to pay employees for overtime hours.” “Lower-paid salaried workers will receive their hard-earned pay or much-deserved time back with their families” as guaranteed by the new final rule.
Economic Policy Institute estimates that of the 4.3 million workers who will benefit from the new rule, 2.4 million are women and nearly a quarter are workers of color. The sectors with the greatest number of affected employees are finance, health care and social services, and professional and business services.
