Labor Dept. Proposes Vast Expansion of Overtime Eligibility

In a transfer that might have an effect on hundreds of thousands of staff, the Biden administration introduced Wednesday that it was proposing to considerably improve the cutoff beneath which most salaried staff robotically obtain time-and-a-half time beyond regulation pay.

Under the proposed rule, issued by the Labor Department, the cutoff for receiving time beyond regulation pay after 40 hours per week would rise to about $55,000 a yr from about $35,500, a degree that was set through the Trump administration.

About 3.6 million salaried staff who fall between the present cutoff and the brand new one would successfully achieve time beyond regulation pay eligibility beneath the proposed rule, the division stated. Some employers might select to boost staff’ pay above $55,000 to keep away from paying time beyond regulation.

Julie Su, the division’s performing secretary, stated in an announcement that the rule “would help restore workers’ economic security by giving millions more salaried workers the right to overtime protections.”

Some trade teams, notably in retail, eating and hospitality companies, have argued that expanded time beyond regulation eligibility may lead many employers to transform some salaried staff to hourly staff and lower their hourly wage to depart their total pay unchanged.

These teams argue that vastly increasing time beyond regulation eligibility may additionally discourage employers from selling staff to junior administration positions that present a path to well-paying careers, as a result of extra employers can be compelled to pay junior managers time beyond regulation after they work lengthy hours.

The proposal follows a equally bold transfer by the Obama administration in 2016, which sought to boost the time beyond regulation cutoff for many salaried staff to $47,500 from about $23,500. But simply earlier than Donald J. Trump took workplace as president, a federal decide in Texas suspended the Obama rule, concluding that the administration lacked the authorized authority to boost the time beyond regulation cutoff so considerably.

The Trump administration later put in the present time beyond regulation restrict of about $35,500.

Under the Biden administration’s proposal, the time beyond regulation restrict would robotically regulate each three years to maintain tempo with rising earnings.