The Biden administration on Tuesday announced an update to a rule extending mandatory overtime pay to an estimated 4 million salaried workers.
The U.S. Department of Labor rule will require employers beginning on Jan. 1, 2025, to pay overtime premiums to salaried workers who earn a salary of less than $1,128 per week, or about $58,600 per year, when they work more than 40 hours in a week, according to Reuters.
The current salary threshold is about $35,500 per year.
“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,” Julie Su, the acting secretary of Labor said.
According to the Department of Labor, under the rule, the salary threshold will increase to $43,888 on July 1 and to $58,656 on Jan. 1, 2025.
Starting in 2027, the threshold will automatically increase every three years to reflect changes in average earnings.
The directive does not affect overtime requirements for workers who are paid hourly, according to The Associated Press. Nearly all hourly workers in the U.S. are entitled to overtime pay after 40 hours a week.
The new rule will also allow some workers with higher salaries to become eligible for overtime pay.
Workers are generally automatically exempt if they earn a salary of more than $107,432. The rule will raise that cutoff to about $151,000.
The move will likely face a legal challenge. A similar move by the Obama administration was shot down in court after the U.S. Chamber of Commerce and more than 50 other business groups filed a legal challenge against the regulation.
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