The Biden administration proposed new rules on Wednesday that would make 3.6 million more US workers eligible for overtime pay, reviving an Obama-era policy effort that ultimately failed in court.
The new rules require employers to pay overtime to white-collar workers who earn less than $55,000 a year. That’s up from the current threshold of $35,568 that has been in place since 2019 when the Trump administration raised it from $23,660. In another significant change, the rule proposes an automatic increase to the salary level each year.
Labor advocates and liberal lawmakers have long pushed for an expansion of strong overtime protections, which have eroded dramatically over the past few decades due to wage stagnation and inflation. The new rules, which are subject to a public comment period and won’t take effect for months, will have the biggest impact on the retail, food, hospitality, manufacturing and other industries where many managerial workers meet the new threshold.
“I have heard from workers over and over again about working long hours, without extra pay, all while earning low wages that don’t even come close to compensating for their sacrifices,” Acting Labor Secretary Julie Su said in a statement. .
President Biden with Acting Secretary of Labor Julie Su on March.AP
The new rules may face pushback from business groups that mounted a successful legal challenge to similar rules Biden announced as vice president during the Obama administration, when he sought to raise the threshold to more than $47,000. But it also falls short of demands by some liberal lawmakers and unions for a higher salary threshold than the proposed $55,000.
Under the Fair Labor Standards Act, almost all hourly workers are entitled to overtime pay after 40 hours in a week, at no less than half their regular rate. But salaried employees who perform executive, administrative or professional roles are exempt from the requirement unless they earn below a certain level.
The left-leaning Economic Policy Institute estimates that about 15% of full-time salaried workers are entitled to overtime pay under Trump-era policies. That compares to more than 60% in the 1970s. Under the new rules, 27% of salaried workers are entitled to overtime pay because they earn less than the threshold, according to the Department of Labor.
The new rules may face pushback from business groups that mounted successful legal challenges to similar rules announced by Biden as vice president during the Obama administration.Christopher Sadowski
Business leaders argue that setting wage requirements too high would exacerbate staffing challenges for small businesses, and could force many companies to convert salaried workers to hourly workers to track work hours. Businesses challenging the Obama-era rule have hailed the Trump administration’s policies as balanced, while progressive groups say they leave behind millions of workers.
A group of Democratic lawmakers has urged the Labor Department to raise the salary threshold to $82,732 by 2026, in line with the 55th percentile of full-time wage earners.
A senior Labor Department official said the new rules would bring the threshold in line with the 35th percentile of earnings by full-time salaried workers. That’s above the 20th percentile under the current rules but less than the 40th percentile under the stalled Obama-era policy.
The National Association of Manufacturers warned last year that it might challenge any expansion of overtime coverage, saying such changes would disrupt supply chain times and labor supply difficulties.
Under the new rules, about 300,000 more manufacturing workers are entitled to overtime pay, according to the Labor Department. A similar number of retail workers are eligible, along with 180,000 hospitality and leisure workers, and 600,000 in the health care and social services sector.
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Source: thtrangdai.edu.vn/en/
