US Dept. of Labor Proposes Expanded Overtime Eligibility

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Facts

• On Wednesday, the US Department of Labor released a proposed rule that would offer mandatory overtime pay to 3.6M salaried workers who make a minimum of approximately $55K per year.¹
• Currently, the minimum salary threshold is $35.5K, which was set during the Trump administration in 2020.¹
• Although the rule establishes that any salaried employee making more than the set threshold is ineligible for overtime pay, it allows for the threshold to be reviewed and updated every three years to “prevent a future erosion of overtime protections.”²
• Previously, the Obama administration in 2016 attempted to raise the cutoff for most salaried employees to $47.5K, but a federal judge suspended that rule on the premise that the Department didn’t have legal authority to make such a drastic change.³
• The new rule wouldn’t take effect for months because it's subject to a public commentary period.⁴

Sources: ¹Reuters, ²Forbes, ³New York Times and ⁴PBS NewsHour.

Narratives

• Democratic narrative, as provided by Washington Post. The middle class needs to be rebuilt after it deteriorated under Trump, and this rule is a step toward raising wages for workers across numerous sectors nationwide. Millions of the nation’s most vulnerable workers — including women, people of color, and workers without college degrees — stand to benefit in the immediate future, and when the rule is updated for inflation every three years.
• Republican narrative, as provided by Townhall. The Biden admin. is so desperate to pander to voters that it’s willing to recycle a failed Obama policy despite courts previously ruling the Department of Labor lacks the authority to implement it. Business leaders warn it will weaken an economy that’s in the doldrums. This jives with Biden’s past attempts at executive overreach and lackluster economic policy. Luckily the courts can protect the American people from this ill-advised idea.