The Biden administration has issued new rules that could allow many salaried workers to start collecting overtime.
On Tuesday, the Department of Labor announced it is raising the minimum salary threshold for exempt employees from $35,568 per year to $43,888 per year in July. The department also said the threshold will go up to $58,656, effective Jan. 1, 2025.
Generally, employers must pay non-exempt workers their usual hourly wage plus 50% for all work beyond 40 hours in a week. The updated thresholds will mean that people making under $58,656 will be eligible for overtime in 2025.
Currently, the Department of Labor allows executive, administrative and professional employees (including teachers and academic administrative personnel in elementary and secondary schools), outside sales employees, and employees in certain computer-related occupations to be exempt from overtime as long as they are paid $684 a week, which equals $35,568.
“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,” said Acting Secretary Julie Su. “Too often, lower-paid salaried workers are doing the same job as their hourly counterparts but are spending more time away from their families for no additional pay. That is unacceptable. The Biden-Harris administration is following through on our promise to raise the bar for workers who help lay the foundation for our economic prosperity.”
The new rule also could affect some salaried employees who make six figures a year. Currently, workers in other fields can be exempt from overtime if they earn $107,432 annually. Starting July 1, the threshold will increase to $132,964 per year. On Jan. 1, 2025, that amount goes to $151,164 per year.
The Department of Labor estimates the new rules will affect millions of workers.
The American Council on Education, a nonprofit advocacy group that represents 1,700 colleges and universities, says the new rule will be challenged in court.
"Colleges and universities are among the largest employers in many communities, providing stable jobs and good benefits to nearly 4 million workers nationwide. The vast majority of our institutions are nonprofits and public entities unable to absorb sudden and massive increases in labor costs, such as the one contained in the Department of Labor’s final rule," said American Council on Education President Ted Mitchell.
