Millions more workers would be entitled to overtime pay under a proposed Biden administration rule

The Biden administration proposed a new rule Wednesday that would make 3.6 million more U.S. workers eligible for overtime pay, the most generous such increase in decades.

The rule revives an Obama-era effort that faced strong pushback from business leaders and Republicans and was ultimately scuttled in court. Labor advocates and liberal lawmakers have pushed the Biden administration to take the fight back up, arguing that overtime protections have been sharply eroded over the decades by wage stagnation and inflation.

The proposed regulation, unveiled by the Department of Labor, would require employers to pay overtime to salaried workers who are in professional, administrative and professional roles but make less than $1,059 a week, or $55,068 a year for full-time employees. That salary threshold is up from $35,568 level that has been in place since 2019 when Trump administration raised it from $23,660.

The rule, which is subject to a public commentary period and wouldn’t take effect for months, would have the biggest impact on retail, food, hospitality, manufacturing and other industries where many managerial employees meet the new threshold.

“I’ve heard from workers again and again about working long hours, for no extra pay, all while earning low salaries that don’t come anywhere close to compensating them for their sacrifices,” acting Secretary of Labor Julie Su said in a prepared statement.

The new rule is certain to face criticism from business groups that mounted the successful legal challenge against similar regulation that 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 the demands by some liberal lawmakers and unions for an even higher salary threshold than the proposed $55,000.

On Long Island and in New York City and Westchester, the threshold is already higher -- $58,500 -- than what the federal rule change would require. The figure is based on minimum wage rates, which vary around New York State.

Long Island's higher threshold went into effect after Dec. 31, 2021, according to the state Labor Department. 

Under the new rule, 27% of salaried workers would be entitled to overtime pay because they make less than the threshold, according to the Labor Department. A smaller number workers would also become newly eligible because of a change to a rule that excludes very highly paid salaried workers from overtime benefits even if they don’t perform administrative, professional or executive duties. The Labor Department proposed raising that salary threshold from $107,432 to $143,988.