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Earn Less Than $55,068? You May Well Get Overtime


If you’re a salaried worker with a desk job earning less than $55,068 a year, a new rule would give you a workplace perk that’s nearly unheard of for white-collar workers: overtime pay.

Key Takeaways

  • A new federal labor rule would boost the minimum salary for required overtime pay to $55,068 from $35,568, making 3.6 million more people eligible for overtime.
  • The rule would affect salaried, white-collar workers who, unlike blue-collar employees, aren’t eligible for overtime unless they earn less than a certain amount of money.
  • Labor advocates applauded the Biden administration measure, while business groups blasted it.

Earlier this week, the Labor Department under President Joe Biden proposed a change to federal labor rules that would require the employers of 3.6 million more people to pay them at 1.5 times their normal rate for every hour worked after 40 each week. Currently, overtime is required for few white-collar workers who are paid on a salary basis, that is, those who are paid a fixed amount regardless of hours worked. 

“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,” Labor Department Acting Secretary Julie Su said in a statement. “I’ve heard from workers again and again about working long hours, for no extra pay, all while earning low salaries that don’t come anywhere close to compensating them for their sacrifices.”

Ever since the Fair Labor Standards Act of 1938, employers of blue collar and hourly-paid workers have had to pay overtime. However, under current rules, many salaried white-collar workers—including teachers, administrative workers, creative workers, and professionals—don’t have to be paid overtime if they earn more than $35,568 a year. 

Under the proposed rules, 27% of full-time salaried workers would get overtime, the Department of Labor estimated. As of 2019, 15% were eligible, down from 60% in 1975, according to an analysis by the Economic Policy Institute, a progressive think tank.

The $55,068 threshold would automatically update every three years, rising along with average earnings.

Progressive groups and labor unions applauded the measure, while business groups said it was costly and would hurt business.

The Associated Builders and Contractors, a trade group that joined a lawsuit that defeated a 2016 attempt by President Barack Obama to reform overtime rules, called the new rule “unnecessary and costly red tape.”

Joanna Swanson

Joanna Swanson is Europe correspondent at the Thomson Reuters Foundation based in Brussels covering politics, culture, business, climate change, society, economies and inclusive tech. With specific focus in breaking news, she has covered some of the world's most significant stories.