OAN’s James Meyers
5:40 PM – Wednesday, August 30, 2023
The Biden administration proposed a new rule on Wednesday that would make 3.6 million more workers eligible for overtime pay.
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The new rule revealed by the Department of Labor, would require employers to pay overtime to salaried workers who make less than $55,000 a year that are in executive, administrative and professional roles.
The new threshold is up from the current one of $35,568, which has been in place since 2019 under the Trump administration, who raised it from $23,660 under the Obama administration.
The new rule is subject to a public commentary period and wouldn’t take effect for several months. The new changes would have the largest impact on retail, hospitality, food, manufacturing and other industries where managerial employees meet the requirements of the threshold.
“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,” acting Secretary of Labor Julie Su said in a statement.
The new rule could face pushback from businesses who won a legal challenge against a similar regulation Joe Biden announced as Vice President with the Obama administration, where they advocated to raise the threshold up to $47,000.
Currently under the Fair Labor Standards Act, almost all U.S. hourly workers are entitled to overtime pay after working over 40 hours a week, at no less than time-and-half their regular rates.
However, salaried workers who perform executive, professional or administrative roles are exempt from that requirement unless they earn below a certain threshold.
27% of salaried workers would be entitled to overtime pay under the new rule, because they make less than the threshold, according to the Labor Department.
However, business leaders argue the new salary requirement would force small businesses to convert salaried workers to hourly ones to track working time.
The National Association of Manufacturers warned last year that this would challenge any expansion of overtime coverage, saying the new changes would disrupt supply chain and labor supply issues.
Additionally, 300,000 more manufacturing workers would be entitled to overtime pay. Along with another 180,000 hospitality and leisure workers, and 600,000 in the health care and social services sector, according to the Labor Department.
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