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Biden Administration Finalizes Overtime Threshold Rule

Our Philadelphia Employment Lawyers at Sidkoff, Pincus & Green P.C. Help Workers Assert Their Rights for Overtime Pay

The Biden Administration has finalized a new rule increasing the salary thresholds required for overtime exemption, a move that will significantly impact the lives of millions of lower-earning salaried workers, making them eligible for overtime pay. The rule, which takes effect July 1, 2024, is the largest expansion in overtime eligibility in decades.

Under current federal law, nearly all hourly American workers are entitled to overtime pay after 40 hours per week, but most salaried workers are exempt. In addition to thresholds, the new rule defines and establishes who is a “bona fide executive, administrative and professional employee” exempt from overtime protections under the Fair Labor Standards Act. 

The U.S. Department of Labor said that approximately four million lower-earning salaried workers currently exempted from overtime pay will become eligible in the first year and an additional 292,900 higher-compensated employees.

The new rule significantly increases the current overtime eligibility threshold of $35,568, set by the previous administration in 2019. In July, employers will be required to pay overtime to salaried employees earning less than $43,888 per year and $132,964 for higher-earning employees. Beginning January 1, 2025, the salary threshold required for overtime pay will increase to $58,656 and $151,164, respectively. Starting July 1, 2027, salary thresholds will be updated every three years.

The U.S. Department of Labor (DOL) Acting Secretary said that lower-earning salaried workers often perform the same job duties as their hourly counterparts but for no additional pay. Enacting the rule is a step towards fairness, fulfilling the president’s promise that all workers—hourly or salaried—would be made eligible to receive overtime pay during his tenure.

The Biden Administration announced plans to adjust the threshold last August and submitted its proposal the following month. The DOL then conducted extensive discussions with employers, workers, unions, and stakeholders and considered over 33,000 public comments before issuing its final rule.

Critics have argued that the regulation could saddle employers with billions in added annual costs and add to continued labor challenges. However, advocates applaud the rule as a long-overdue measure, finally addressing a threshold policy that has not been properly revised in nearly 50 years, leaving millions of American workers unprotected.

Our Philadelphia Employment Lawyers at Sidkoff, Pincus & Green P.C. Help Workers Assert Their Rights for Overtime Pay

/If you believe you are being denied valid overtime wages, our experienced Philadelphia employment lawyers at Sidkoff, Pincus & Green P.C. can help. Call today at 215-574-0600 or contact us online to schedule an initial consultation. Located in Philadelphia, we serve clients throughout Pennsylvania and New Jersey, including South Jersey.