37 June 2024 Business, Contracting, Markets On April 23, the U.S. Department of Labor (DOL) unveiled a new overtime pay rule that will qualify salaried workers—who are classified as executive, administrative, or professional (EAP)— earning less than $43,888 a year for 1.5 times pay, if they work more than 40 hours a week. The current threshold is $35,568 a year. This bump-up is implemented in two phases. The first increase begins July 1 of this year. The threshold again expands January 1, 2025 to $58,656. The rule aims to increase wages for workers in low-wage, but salaried occupations, by making them eligible for time-and-a-half pay. Most hourly workers are already entitled to overtime pay; but non-hourly EAP workers are exempt from overtime pay unless they earn less than the threshold set by the DOL. An analysis of the rule by the Economic Policy Institute found that 4.3 million more U.S. workers will be eligible for overtime pay because of this rule change. Going forward, salary thresholds for overtime eligibility will be updated higher every three years. This final rule—like so many other overreaching Biden Administration rulemakings—will certainly face litigation by business groups and possible suspension. The current threshold of a little over $35,000 was implemented by a rule adopted during the Trump Administration. The Biden Administration is in overdrive mode during its last term-year, issuing Federal Overtime Rule Change ›By Rex Storm, Executive Vice President numerous and injurious regulations in an effort to armor the President’s anti-business legacy, should there be a different administration next year. In addition to anticipated litigation efforts to derail the costly new Biden rules, we expect to see legislation introduced to overturn this new overtime rule. AOL will keep you apprised of activity on key rules, legislation successes, and subsequent rule suspensions. t
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