Biden Expands Overtime Protections for 1 Million Workers

The new increase was made ‘based on the methodology used by the prior administration in the 2019 overtime rule update.’

The Biden administration extended overtime protections on July 1 for one million workers making less than $43,888 a year, and President Joe Biden pledged to expand those protections in 2025 to another 3 million workers, the White House said in a statement.

“A hard day’s work should lead to a fair day’s pay,” President Biden said in the Monday announcement.

Almost all hourly workers in the United States who exceed 40 hours of work in a week are entitled to overtime pay no less than one and a half times their normal rate, according to the Fair Labor Standards Act (FLSA). More than 140 million workers are covered by this act.

However, salaried employees engaged in administrative, executive, or professional rules are exempt if they are earning above a certain salary threshold.

The threshold of $43,888, or $844 per week, is an increase from the previous $35,568 annual salary threshold.

The extensions stem from a Fair Labor Standards rule that was finalized in late April, with the next extension set to go into effect on Jan. 1, 2025.

The Department of Labor also has protection for what it calls “highly compensated employees,” making up to $132,964 per year, including at least $844 per week on a salary or fee basis. The previous threshold for those employees was $107,432 per year and weekly payment of at least $684 on a salary or fee basis.

The Biden administration said in an April 23 statement that the new increase was made “based on the methodology used by the prior administration in the 2019 overtime rule update.”

The overtime threshold is set to increase to $58,656 in 2025. Beginning on July 1, 2027, that threshold will be updated every three years by applying “up-to-date wage data.”

“For more than 80 years, the 40-hour workweek has been a pillar of fairness for American workers,” said Acting Labor Secretary Julie Su said in a statement released on July 1. “It’s the promise of going home to loved ones after putting in your time, not endless hours for flat pay. Far too many are stuck in jobs that disregard this principle.

“Today, our rule to restore that balance by expanding overtime protections for our nation’s lower-paid salaried workers goes into effect.”

The Labor Department points out, however, that certain employees, such as doctors, lawyers, and teachers, are not subject to salary standards and may still fall within the exemption to the rule regardless of how and how much they are paid. Employers are also allowed to use bonuses and incentive payments such as commissions to account for up to 10 percent of an exemptable salary.