New Biden administration overtime rule increases pay for millions of workers

Millions more salaried U.S. workers will begin getting overtime pay when a new Biden administration labor rule takes effect July 1. Acting Labor Secretary Julie Su said lower paid salaried workers previously ineligible will get overtime pay for the first time. File photo by Chris Kleponis/UPI

April 24 (UPI) -- The Biden administration adopted a final rule extending overtime pay protections to millions of salaried workers

Under the rule, effective July 1, those workers will make more money for working more 40 hours a week.

"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," Acting Secretary Julie Su said in a statement. "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."

She added the Biden administration is following through on a promise to "raise the bar for workers who help lay the foundation for our economic prosperity."

Roughly 3.6 million workers will be newly eligible for overtime pay under the new rule.

The workers were previously ineligible for overtime due to their "management" status and salary levels.

The new rule will increase the salary threshold that triggers overtime pay. It will go from the current $35,568 to $43,888 on July 1.

It increases to $58,656 on Jan. 1, 2025.

According to the Labor Department, the new rule will also automatically adjust the salary overtime threshold for highly compensated employees by updating automatically every three years beginning July 1, 2027.

The new adopted rule clarifies definitions of executive, administrative and professional employees exempt from the Fair Labor Standards Act's overtime pay protections.

"This rule establishes clear, predictable guidance for employers on how to pay employees for overtime hours and provides more economic security to the millions of people working long hours without overtime pay," Labor Department Wage and Hour Administrator Jessica Looman said.

She said it makes sure lower-paid salaried workers get hard-earned overtime pay or get "much-deserved time back with their families."

The rule provides employees not exempt from overtime rules to get time-and-a-half pay when working more than 40 hours in a week or the option of more time off with their families.

U.S. worker overtime pay protections are included in the Fair Labor Standards Act. It requires "overtime pay for hours worked over forty in a workweek at a rate not less than time and one-half their regular rates of pay."