Labor Dept. proposes overtime rule change for salaried workers

The Department of Labor proposed a rule that it said would make nearly 4 million more Americans eligible for overtime pay. The rule would allow salaried employees who makes less than $55,000 per year eligible for overtime.

That would be a raise from the current threshold of $35,568, making about 3.6 million more salaried workers eligible. In 2019, the Trump administration raised the threshold from $23,660.

Labor advocates have long pushed a strong expansion of overtime protections, which have eroded in recent decades due to wage stagnation and inflation. The new rule would have the biggest impact on retail, food, hospitality, manufacturing and other industries where many managerial employees meet the new threshold.

“For over 80 years, a cornerstone of workers’ rights in this country is the right to a 40-hour workweek, the promise that you get to go home after 40 hours or you get higher pay for each extra hour that you spend laboring away from your loved ones,” Acting Labor Secretary Julie Su said in a statement. “I’ve heard from workers again and again about working long hours, for no extra pay, all while earning low salaries that don’t come anywhere close to compensating them for their sacrifices.”

The Labor Department’s overtime rule proposal is likely to receive pushback from business groups, which mounted a successful legal challenge against a similar proposed regulation President Joe Biden announced as vice president during the Obama administration. Back in 2022, the National Association of Manufacturers warned a rule change would be disruptive at time of lingering supply chain and labor supply difficulties.

The proposal also may run afoul of some liberal lawmakers and unions who have pushed for an even higher threshold. A group of Democratic lawmakers have urged the Labor Department to raise the salary threshold to $82,732 by 2026, in line with the 55th percentile of earnings of full-time salaried workers.