Do you qualify? Biden rule expanding overtime pay goes into effect
(The Hill) – President Biden is extending overtime protections to workers who make less than the median individual salary, and is vowing to take more action if reelected.
The executive action announced Monday will extend protections to workers making salaries of less than $43,888 a year, the White House said in a statement. Previous overtime protection rules had only applied to salaried employees making less than $35,568 per year.
“That means higher paychecks and more time with family for millions of Americans,” Biden said.
The president pledged to extend the protections further next year if Democrats hold onto the White House, boosting overtime benefits to 3 million additional workers with an increased threshold of $58,656 — an amount that goes above the median individual salary of $47,960, as specified in Census data.
The new overtime extensions, which go into effect Monday, stem from a rule finalized in April in a section of the Fair Labor Standards Act. The changes are a result of an updated Labor Department calculation.
The rule change from Democrats is set to increase every three years starting in 2025, Acting Labor Secretary Julie Su said in a statement.
“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,” Su said in April, when the new overtime rule was finalized. “Too often, lower-paid salaried workers are doing the same job as their hourly counterparts but are spending more time away from their families for no additional pay. That is unacceptable. The Biden-Harris administration is following through on our promise to raise the bar for workers who help lay the foundation for our economic prosperity.”
Low-income workers saw their wages rise faster in the aftermath of the pandemic than the national average, a phenomenon known as “wage compression” that gave workers more freedom and was first identified by researchers at the Massachusetts Institute of Technology and University of Massachusetts.
“Wage compression was accompanied by rapid nominal wage growth and rising job-to-job separations — especially among young non-college (high school or less) workers,” the researchers found.
The rise in lower-income wages may have had an effect on the 2022 midterm election, which many forecasters thought would result in a “red wave” of major wins for Republicans. Instead, Democrats kept the Senate while Republicans only narrowly took the House.
While the economy was a top issue in 2022 as inflation soared to a nearly 9 percent annual increase, experts noted the boosted wages and more favorable working conditions may have translated into votes for Democrats.
“[Many voters] were better off than they were two years ago, so the electoral blowback was minimal,” Matt Darling, a fellow in employment policy at the Niskanen Center, a think thank, told The Hill in 2022.
The policy announcement follows a debate performance on Thursday from the president that has rattled many Democrats and led to panic throughout party ranks, according to numerous media reports.
Biden has styled himself as one of the most pro-labor presidents in U.S. history, being the first to join an active picket line with the United Auto Workers labor union in their strike last year at the Big Three U.S. automakers.
While Biden has supported the expiration of the Trump-era tax cuts, individual provisions of which are due to sunset at the end of next year, he has also pledged not to raise taxes on Americans making less than $400,000 a year.