Millions of workers earning less than $55,000 could get overtime pay under Biden proposal

About 3.6 million additional workers would be entitled to overtime pay under a new proposal from the Biden administration. The proposed rule would lift the cutoff for the extra earnings from its current level of $35,568 to $55,000 annually.

The new overtime proposal from the Department of Labor is aimed at rectifying what it calls an “outdated” system where low-paid salaried employees aren’t getting time-and-a-half pay if they work more than 40 hours a week. The rule would also require that the salary threshold for earning overtime would be updated every three years to reflect current income data.

The proposal comes four years after the overtime rule was last updated, when the salary threshold was raised to $35,568 a year, a 50% increase from the previous threshold of $23,660 annually. At the same time, research has indicated that employers are increasingly turning to strategies to tamp down overtime pay, such as companies that inflate workers’ titles to avoid paying them in full for overtime work.