A proposed change in federal labor laws could expand overtime eligibility to more than 1 million salaried workers in the U.S.
The U.S. Department of Labor proposed raising the overtime threshold to most salaried workers earning an annual salary of $35,308 or $679 per week so that employees making less than that amount would be eligible for time-and-a-half pay for any hours over 40 worked per week.
Currently, the overtime threshold sits at $23,660 or $455 per week, so anyone making more than that isn’t eligible for overtime pay. The government set the current overtime threshold 15 years ago.
The Labor Department will open the proposed rule to a 60-day public comment period and expects that it will go into effect in January.
The proposed salary threshold is substantially lower than the one proposed under the Obama administration in 2016. Labor officials then wanted anyone making less than $47,500 to be eligible for overtime, but a federal judge in Texas blocked the rule from taking effect, claiming the administration lacked the authority to implement the increase.
The Trump administration appealed the judge’s decision and asked the court to suspend litigation of the case until it could rework the rule.
While virtually all Democrat lawmakers and many Republican lawmakers feel a boost to the overtime threshold is needed, there are usually sharp disagreements over where to draw the line.
The New York Times notes that some legislators argued the salary threshold proposed by the Obama administration in 2016 was too high and would be too costly for businesses to implement. The Obama administration argued that the proposed increase was modest by historical standards and that it would make fewer than 4 million additional workers eligible for overtime – far less than the percentage of workers who benefited from previous increases.
Other skeptics argued that the change wouldn’t affect many workers because employers would lower the base wage of people who work significant overtime hours, leaving their total pay, including wages and overtime, roughly unchanged. Moreover, some skeptics say that some employees under the threshold but close to it could be given a slight raise to boost them above the threshold and ineligible for overtime pay under the law.