Washington, DC — The National Employment Law Project (NELP) commends the U.S. Department of Labor (DOL) for its proposed rule to strengthen and expand overtime protections for more workers across the country. This proposed rule is an important, but not final, step toward addressing the extremely low salary threshold set by the last administration in 2019. This updated rule will increase the number of workers who will be automatically entitled to overtime compensation and help bring relief to workers struggling to make ends meet due to inflation and the rising cost of living.
By raising the salary threshold to $55,068 per year/$1059 per week, DOL will provide new and enhanced protections for millions of workers who are working more than 40 hours per week for no additional compensation. By indexing this salary threshold every three years, DOL will ensure that overtime protections do not stagnate, that they are aligned with routine cost of living increases for workers, and that employers will have the predictability of regular modest adjustments to overtime eligibility that they can plan for year to year.
“Once again, the Biden Administration is listening to workers’ voices by taking these much-needed steps to strengthen overtime protections,” said Rebecca Dixon, President and CEO of NELP. “Ensuring this proposed rule is finalized and implemented as soon as possible is essential because workers don’t deserve to wait any longer for the benefits this rule will provide.”
The new overtime rule will have one of two primary effects on newly eligible or covered workers. It may put more money into the pockets of employees if their employers want to continue having them work in excess of 40 hours per week. This not only bolsters workers’ lives and communities, but it also fuels economic growth.
For employers who do not wish to pay overtime, the new rule is an incentive to adopt employment practices that respect workers’ time and contributions. The Fair Labor Standards Act overtime protections were enacted to spread employment among more workers, rather than overworking those already on the payroll. The new rule upholds the FLSA’s intentions.
Rather than relying on unpaid or off-the-clock overtime hours, businesses may now choose to reassess workloads, consider hiring additional staff, and/or converting part-time workers to full-time. This shift will foster both a healthier work-life balance and an environment where employees are compensated with fair pay, which can also result in new hiring.
Though this new rule will have far-reaching positive effects on the lives of workers across the country, by setting the salary threshold at only $55,068, and pegging the threshold to the lowest cost of living region in the country, DOL has proposed a modest threshold by historical standards, and one that is lower, in inflation adjusted terms, than the threshold DOL attempted to implement in 2016 under the Obama Administration.
The modest nature of this proposed rule demonstrates the need for Congress to step up and provide the full measure of overtime protections that workers need. NELP calls on Congress to take up the Restoring Overtime Pay Act, championed by Senator Sherrod Brown (D-OH) and Representative Mark Takano (D-CA), and to finish the job that DOL is starting.
