The U.S. Department of Labor made an announcement on Tuesday about a final rule that will expand the number of Americans eligible for overtime pay.
Starting July 1, a new rule will come into effect that is set to impact millions of Americans. As a result of this rule, workers earning up to a salary equivalent of $43,888 will now be entitled to receive overtime pay.
Starting from January 1st of the upcoming year, the threshold for federal overtime pay requirements will increase to $58,656. Previously, employees earning over $35,568 were exempt from these regulations.
Acting DOL Secretary Julie Su expressed that this rule aims to uphold the principle that if an employee works over 40 hours in a week, they should receive extra compensation for that additional time. She emphasized that it is unjust for lower-paid salaried workers to perform the same tasks as their hourly counterparts but not receive any extra pay, despite spending more time away from their families. Su highlighted that the Biden-Harris administration remains committed to improving the standards for workers who play a crucial role in building the foundation of our economic prosperity.
Small businesses are expressing strong opposition to the new overtime rule implemented by the Biden administration, with experts suggesting that it may be subject to legal challenges.
According to a statement released by the National Federation of Independent Businesses on Tuesday, the rule will impose a burden on small businesses.
Beth Milito, Executive Director of NFIB’s Small Business Legal Center, expressed her concern about this rule, stating that it imposes an additional burden on small business owners. She highlighted the fact that small businesses will have to allocate valuable time to assess their workforce and make necessary adjustments to salaries or employee classifications in accordance with this complex mandate. Milito emphasized that unlike larger corporations, Main Street businesses do not have the luxury of having a team of lawyers or compliance officers readily available to assist with the implementation of new government standards. Furthermore, she pointed out that small businesses often lack the financial resources to arbitrarily increase wages, as they are already striving to provide their employees with the highest compensation and benefits possible.
The Biden administration contends that the rule will be beneficial for workers.
“The Department of Labor is committed to ensuring that lower-paid salaried workers are justly compensated for their efforts and have the opportunity to spend quality time with their loved ones,” stated Jessica Looman, the Wage and Hour Administrator. She further emphasized, “This rule establishes transparent and reliable guidelines for employers to accurately compensate employees for their overtime hours, ultimately bringing greater economic stability to the millions of hardworking individuals who have been working long hours without receiving proper overtime pay.”