New Biden proposal could bring overtime pay to more than 3.6 million

According to a newly U.S. Department of Labor proposed regulation, 3.6 million salaried employees will become eligible for overtime pay. The proposal ensures that most salaried employees, earning less than $55,000 annually. would receive at least time-and-a-half in overtime compensation.

The current threshold is $684 a week, or roughly $35,600 a year, which was put into place by the Trump administration in 2019. 

According to the agency, the proposed rule would shift $1.2 billion in wages from employers to workers, mainly in the form of increased overtime premiums or pay increases to maintain the exempt status of some impacted employees. To keep up with changes in earnings, the proposal would also automatically increase the income threshold every three years.

“Small businesses often struggle with the ever-changing nature of federal regulations.”– Beth Milito, Executive Director of NFIB’s Small Business Legal Center.

The Labor Department reported the initiative would ensure that lower-paid salaried workers who put in more than 40 hours a week enjoy the same overtime protections as hourly workers.

Acting Labor Secretary Julie Su said, “I’ve heard from workers repeatedly about working long hours for no extra pay, all while earning low salaries that don’t come close to compensating them for their sacrifices.”

The initiative is already facing opposition from business groups, as they did successfully when the Obama administration tried to raise the threshold drastically.

Following the Associated Builders and Contractors, ABC, it has repeatedly requested that the department drop or delay the proposed regulation until the economic situation has stabilized or improved.

Ben Brubeck, the organization’s vice president of regulatory, labor, and state affairs, said in a statement: “ABC is disappointed that the DOL is moving forward with a proposed overtime rule since multiple industries, like construction, are still dealing with the lingering economic consequences of inflation, global supply chain disruptions, rising material prices, and workforce shortages, all of which push operational costs ever higher.”

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