In a move aimed at bolstering workers’ rights, the Biden-Harris administration has unveiled a final rule that expands overtime protections for millions of the nation’s lower-paid salaried employees. The new regulation, announced today, increases the salary thresholds required to exempt a salaried bona fide executive, administrative, or professional employee from federal overtime pay requirements.
Effective July 1, 2024, the salary threshold will rise to the equivalent of an annual salary of $43,888. This marks a substantial increase from the present threshold of $35,568, based on the methodology used by the prior administration in the 2019 overtime rule update. Furthermore, the threshold is set to escalate to $58,656 on Jan. 1, 2025, under the rule’s new methodology.
Acting Secretary Julie Su emphasized the significance of the rule, stating, “This rule will restore the promise to workers that if you work more than 40 hours in a week, you should be paid more for that time.” Su highlighted the Biden-Harris administration’s commitment to enhancing economic prospects for workers, particularly those contributing to the nation’s economic foundation.
The rule also addresses the issue of lower-paid salaried workers performing duties akin to their hourly counterparts but not receiving additional pay for extra hours worked. Acting Secretary Su labeled this disparity as “unacceptable,” underscoring the administration’s determination to rectify such inequities.
Wage and Hour Administrator Jessica Looman emphasized the rule’s role in providing economic security to workers, stating, “The Department of Labor is ensuring that lower-paid salaried workers receive their hard-earned pay or get much-deserved time back with their families.”
Key provisions of the final rule include expanding overtime protections to lower-paid salaried workers, ensuring that those not exempt from overtime pay receive fair compensation for extra hours worked. Additionally, the rule establishes regular updates to the salary thresholds every three years to reflect changes in earnings, safeguarding against the erosion of overtime protections over time.
The Biden-Harris administration’s decision follows extensive engagement with employers, workers, unions, and other stakeholders, with over 33,000 comments considered in developing the final rule. The updated regulation defines and delimits who qualifies as a bona fide executive, administrative, or professional employee exempt from the Fair Labor Standards Act’s overtime protections.
The new rule is effective July 1, 2024.
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