- Aug 3, 2012
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New Biden rule would make 4 million white-collar workers eligible for overtime pay
Overtime pay would cover 4 million more workers by January 1 under a new Biden administration rule that boosts the salary threshold for exemption
www.usatoday.com
The Biden administration on Tuesday announced a new rule that would make millions of white-collar workers newly eligible for overtime pay.
Starting July 1, the rule would increase the threshold at which executive, administrative and professional employees are exempt from overtime pay to $43,888 from the current $35,568. That change would make an additional 1 million workers eligible to receive time-and-a-half wages for each hour they put in beyond a 40-hour week.
On January 1, the threshold would rise further to $58,656, covering another 3 million workers.
The initial bump in the salary threshold to $43,888 that takes effect July 1 is based on a Trump administration formula that sets it at the 20th percentile of the full-time weekly earnings of salaried employees in the lowest-wage region, which is currently the South. The increase to $58, 656 on January 1 adopts a new formula that sets the threshold at the 35th percentile of those weekly earnings.
The Labor Department also said it raised the threshold for “highly compensated” employees who only need to perform one of the duties of executive, administrative or professional workers to be exempt from overtime. That benchmark will rise from $107,452 to $151,164 by January.
Starting July 1, 2027, the rule requires Labor to adjust the salary threshold every three years to account for updated wage data.
