You are here

Millions more workers will be eligible for overtime pay under new federal rule

May 27, 2016 / Media Coverage / Washington Post — Jonnelle Marte

Obama administration unveiled a new rule Wednesday that will make millions of middle-income workers eligible for overtime pay, a move that delivers a long-sought victory for labor groups.

The regulations, which were last updated more than a decade ago, would let full-time salaried employees earn overtime if they make up to $47,476 a year, more than double the current threshold of $23,660 a year. The Labor Department estimates that the rule would boost the pay of 4.2 million additional workers.

The change is scheduled to take effect Dec. 1.

The move caps a long-running effort by the Obama administration to aid low- and middle-income workers whose paychecks have not budged much in the last few decades, even as the top earners in America have seen their compensation soar. The last update to the rules came in 2004, and Wednesday’s announcement is the third update to the salary threshold for overtime regulations in 40 years.

“Along with health care reform, this is one of the most important measures that the Obama administration has implemented to help middle-wage workers,” said Jared Bernstein, a former chief economist for Vice President Biden and a senior fellow at the Center on Budget and Policy Priorities.

About 35 percent of full-time salaried employees will be eligible for time and a half when they work extra hours under the new rule, up significantly from the 7 percent who qualify under the current threshold, according to the Labor Department.

           *          *         *

Contact Us

If you believe you are eligible for overtime pay or you are being paid incorrectly, please contact us for a free consultation.