Biden administration to guarantee overtime pay to 3.6 MILLION workers earning less than $55,000 in resurrected Obama policy – but trade bodies hit back at ‘unnecessary and costly’ proposal

Millions of workers earning less than $55,000 a year will be entitled to overtime pay, according to new proposals from the Biden administration.

The rule ensures that employees are paid an hour and a half for every hour they work during a 40-hour work week. About 3.6 million people will benefit from the change led by the US Department of Labor.

But corporate groups have hit back on the plan, that’s because companies are already struggling to keep rampant inflation under control.

Announcing the proposal, Superintendent of Wages and Hours Department Jessica Looman said: “We want to ensure that all employees are paid fairly for their hard work.

For too long, many low-wage workers have not been paid overtime, even though they often work long hours and do much of the same work as their colleagues on an hourly basis.

About 3.6 million people will benefit from the change led by the US Department of Labor

“This proposed rule would ensure that more employees receive extra pay if they work long hours.”

Currently, only employees earning less than $35,568 are automatically charged overtime if they work more than 40 hours per week, under the Fair Labor Standards Act.

But employees who are salaried, exceed the threshold requirement and work in a “bona fide executive, administrative or professional capacity” are not covered by this law — as long as they meet all three requirements.

It means workers in low-paid, but salaried, occupations such as hospitality, manufacturing, and retail will stand to gain the most.

And another major change that is being proposed is that the overtime pay threshold will be automatically updated every three years. The updates will be based on average wage data.

The new proposal marks the resurgence of an effort by the Obama administration to raise the salary threshold for the overtime test to $47,476.

But it was blocked in 2017 by the Texas-based US court, which found the threshold was too high.

And many trade associations, including the Associated Builders and Contractors (ABC), have spoken out about the “new, unnecessary and costly red tape.”

The new proposal marks the resurgence of an effort by the Obama administration to raise the salary threshold for the overtime test to $47,476. Obama is pictured during the midterm elections in Atlanta, Georgia in October 2022

Ben Brubeck, ABC’s vice president of regulatory and state affairs, said in a statement: “It is unfortunate that the DOL has not listened to our repeated requests to halt or delay the proposed overtime rule until the current economic situation stabilizes. or improves.’

Similarly, the National Retail Federation said: ‘The threshold proposed by the government is well above the rate of inflation.

We are not convinced that such an increase is justified at this time. Second, we have questioned the department’s authority to try to tie the hands of future governments through automatic increases.”

However, Democrats and labor advocates were quick to praise the plan.

The CEO and Chairman of the National Employment Law Project said, “Ensuring that this proposed rule is finalized and implemented as soon as possible is essential because employees do not deserve to wait any longer for the benefits this rule will bring.”

The proposal will then be published in the Federal Register — after which members of the public will have 60 days to submit their input on the changes.