The Biden Rule: Increased Overtime Pay and Labor Benefits
The Biden administration has implemented a new rule that expands eligibility for overtime pay to millions of salaried workers in the United States. This measure represents the largest expansion in federal overtime eligibility in decades and will take effect starting July 1.
According to the Department of Labor, employers will now be required to pay overtime to salaried workers earning less than $43,888 per year in specific executive, administrative, and professional roles. This threshold will increase to $58,656 at the beginning of 2025, as reported by The Associated Press.
Acting Labor Secretary Julie Su emphasized that this measure aims to address the issue where low-wage salaried workers perform the same tasks as their colleagues but do not receive additional compensation for the extra time dedicated to work.
This new rule marks a significant change from the previous threshold of $35,568 set during the Trump administration in 2019. It follows a prior effort during the Obama era that was challenged in court and faced opposition from business leaders and Republican politicians.
Additionally, the rule extends overtime eligibility to some highly paid workers, raising the annual threshold from $107,432 to $132,964 on July 1 and to $151,164 at the beginning of 2025.
It is estimated that around 4 million low-wage salaried workers who were previously exempt will now be eligible for overtime protection in the first year under the new rule. Additionally, approximately 292,900 higher-paid workers will gain overtime rights.
The methodology for updating salary thresholds will come into effect on January 1, and these thresholds will be reviewed every three years based on the most recent wage data. The implementation of this rule demonstrates a broad commitment to employers, workers, unions, and other stakeholders.
While there have been criticisms of the new rule related to potential increased costs for businesses, supporters view it as a necessary step towards a fairer and more equitable economy for workers. The rule received over 33,000 comments during its development process at the Department of Labor.
Overall, the Biden administration’s commitment to elevating labor standards through this new rule is a significant step towards ensuring fair compensation and labor protections for American workers.
