Six years after a federal judge blocked a Department of Labor rule increasing the number of workers able to collect overtime pay, the department issued a proposed rule increasing overtime access to workers.
The proposed rule would increase the salary threshold for workers able to collect overtime from $35,568 annually to $55,068.
The Fair Labor Standards Act (FLSA), which governs minimum wage and overtime requirements, applies to all businesses with at least $500,000 in annual gross sales volume. The Labor Department estimated an additional 3.4 million workers would be eligible for overtime under the proposed rule.
Acting Labor Secretary Julie Su said the proposal ensures workers who exceed 40-hour work weeks are paid for spending time away from family and friends.
“I have heard from workers again and again about working long hours, for no extra pay,” Su said, “all while earning low salaries that do not come anywhere close to compensating them for their sacrifices.”
A 2017 rule would have doubled the threshold from $23,660 to $47,476. A federal judge said the Labor Department improperly looked at salaries instead of job descriptions when determining whether a worker should be eligible for overtime pay.
Three years later, the department issued a rule to raise the threshold to $35,568. Adjusted for inflation today, the amount would be $42,594 now.
“Four years have passed since the 2019 rule, during which time salaried workers in the U.S. economy have experienced a rapid growth in their nominal wages, which lessens the effectiveness of the current salary level threshold,” the Labor Department’s proposed rule said. “Through this rulemaking, the department seeks to update the salary level test to more effectively identify who is employed in a bona fide executive, administrative, or professional capacity and ensure that the FLSA’s intended overtime protections are fully implemented.”
The rule also would include automatic salary threshold increases for overtime eligibility every three years.
The proposal does not change the other two parts of the executive, administrative or professional exemption to overtime pay—whether the worker is paid a salary, rather than hourly, and whether they perform executive, administrative, or professional duties, as provided in the department’s regulations.
