The Biden-Harris administration finalized a rule that expands overtime protections for salaried workers in the United States. The rule raises the salary thresholds that determine exemption from federal overtime pay requirements for bona fide executive, administrative or professional employees.
Effective July 1the salary threshold for the exemptions will be raised to $43,888 annually, an increase from the current threshold of $35,568. This adjustment follows the methodology set by the previous administration in 2019. A further increase to $58,656 will take effect January 1, 2025, applying a new methodology designed to reflect current wage data more accurately.
Julie Su, acting secretary of labor, emphasized the administration’s commitment to fair labor standards.
“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,” she says.
Su also highlighted the unfairness experienced by lower-paid salaried workers, who often work longer hours without additional compensation, unlike their hourly counterparts.
The Department of Labor engaged extensively with various stakeholders, including employers, workers, unions and others, to draft this rule, according to a Department of Labor press release. The feedback process included the consideration of over 33,000 comments which helped shape the final provisions.
Key features of the new rule include the following:
- expanded overtime protections to include more lower-paid salaried workers
- regular updates to the salary thresholds every three years, starting from July 1, 2027, to adapt to changes in wage data and ensure that the protections remain effective
- clear criteria for determining which employees are truly executive, administrative or professional, and exempt from overtime
