The U.S. Department of Labor announced Tuesday a final rule that increases the number of Americans who will be paid overtime for their work.
The rule, which takes effect July 1 and is expected to impact millions of Americans, means that workers making as much as a salary equivalent of $43,888 must receive overtime pay.
On Jan. 1 of next year, that number rises to $58,656. Before the rule change, workers making more than $35,568 were exempt from federal overtime pay requirements.
“This rule will restore the promise to workers that if you work more than 40 hours in a week, you should be paid more for that time,” Acting DOL Secretary Julie Su said in a statement. “Too often, lower-paid salaried workers are doing the same job as their hourly counterparts but are spending more time away from their families for no additional pay. That is unacceptable. The Biden-Harris administration is following through on our promise to raise the bar for workers who help lay the foundation for our economic prosperity.”
Small businesses are blasting the new Biden administration overtime rule, and experts say it could face a legal challenge.
The National Federation of Independent Businesses released a statement Tuesday saying small businesses will be burdened by the rule.
“This rule is another costly hoop for small business owners to jump through. Small businesses will need to spend valuable time evaluating their workforce to properly adjust salaries or reclassify employees in accordance with this complicated mandate,” Beth Milito, Executive Director of NFIB’s Small Business Legal Center, said in a statement. “Main Street businesses do not have teams of lawyers or compliance officers on site to help implement changes every time a new government standard is enacted. They also don’t have the extra funds to arbitrarily increase wages when they are already doing everything in their power to provide the highest compensation and benefits they can for their employees.”
The Biden administration argues the rule will help workers.
“The Department of Labor is ensuring that lower-paid salaried workers receive their hard-earned pay or get much-deserved time back with their families,” Wage and Hour Administrator Jessica Looman said in a statement. “This rule establishes clear, predictable guidance for employers on how to pay employees for overtime hours and provides more economic security to the millions of people working long hours without overtime pay.”
