Millions of salaried workers stand to benefit under a new proposal revealed by the Biden administration in late August. The draft rule puts forward an adjustment to overtime pay eligibility, meaning more workers would be covered by this right.
However, not everybody is in favor of the proposal, as business groups are expected to fight back against it. The previous attempt by Obama's administration to implement a similar measure was met with resistance by these groups. Nevertheless, this proposal offers hope to many salaried workers that they will receive fair and favorable compensation for their hours worked.
Biden Proposal to Restore & Extend Overtime Protections
The proposed rule aims to raise the threshold for automatic eligibility for overtime pay to approximately $55,000 per year (less than $1,059 per week) from the current rate of $35,000. If implemented, the new measure is expected to make about 3.6 million salaried workers eligible for time-and-a-half pay.
The Biden proposal would do the following:
- Restore and extend overtime protections for low-paid salary employees.
- Give workers who are not exempt valuable time back.
- Prevent future erosion of overtime protections.
- Reestablish overtime protections for U.S. territories.
Currently, many salaried managers in retail and fast food are exempt from earning overtime pay even when working long hours. The proposal is another step towards helping employees receive the pay they’ve worked for. As noted by Acting Secretary Julie Su, "For over 80 years, a cornerstone of workers' rights in this country is the right to a 40-hour workweek, the promise that you get to go home after 40 hours or you get higher pay for each extra hour that you spend laboring away from your loved ones."
Past Overtime Pay Proposals
In previous years, the Labor Department under the Obama Administration proposed a similar increase, seeking to raise the threshold from $23,660 to $47,476. However, this proposal was blocked by a federal judge.
In following years, the Trump Administration implemented a threshold of $35,000. However, with Biden's plan, American workers could potentially see a more equitable and sustainable salary increase in the future. Within the proposal, the Biden administration seeks to prevent future erosion of overtime protections by raising the threshold every three years to keep pace with rising wages.
Proposal Concerns & Pushback
The National Retail Federation has recently stated its intention to study the proposed rule that includes raising the salary threshold to $55,000. However, the organization has expressed concerns that the increase may be too large.
According to David French, the federation’s senior vice president of government relations, “…the attempt to tie the hands of future administrations through automatic increases exceeds the Department’s authority.”
Associated Builders & Contractors
In addition, business groups are already pushing back against the proposal. For example, in a CNN article, the Associated Builders and Contractors have stated that they have repeatedly asked the department to “abandon or postpone the proposed rule until the economy stabilizes or improves.”
The ABC’s concerns regard multiple industries, such as construction where they are still “grappling with the lingering economic consequences of inflation, global supply chain disruptions, rising materials prices, and workforce shortages, all of which push operational costs ever higher.”
National Restaurant Association
The National Restaurant Association is another organization with concerns over the proposed rule that would raise costs for affected restaurants. The Biden proposal would increase costs for affected restaurants by 2.5%. However, the average small business restaurant runs on a margin of 3% to 5%.
The association’s executive vice president of public affairs, Sean Kennedy states, “Adding this kind of cost to the already high price of food and years of increasing labor costs will leave many of these operators in the untenable position of raising prices, cutting costs, or closing their doors.”
Despite concerns and pushback, the Labor Department is seeking comment on the proposed rule for 60 days.
Contact Our Wage & Hour Attorneys
The Biden proposal has brought significant attention to the issue of unpaid overtime in America. If you suspect that your employer is violating wage laws and withholding overtime pay, it is crucial to seek help from experienced professionals.
Our wage and hour attorneys at Shellist Lazarz Slobin can be here to assist you. Our experienced lawyers can work tirelessly to investigate your case, protect your rights, and more. Contact us today, and let us help you pursue the justice you deserve.
Call (713) 352-3433 or get in touch with us online.