The Biden administration will propose a new rule Wednesday that would make 3.6 million more U.S. workers eligible for overtime pay, reviving an Obama-era policy effort that was ultimately scuttled in court.
The new rule, shared with The Associated Press ahead of the announcement, would require employers to pay overtime to so-called white collar workers who make less than $55,000 a year. That's up from the current threshold of $35,568 which has been in place since 2019 when Trump administration raised it from $23,660. In another significant change, the rule proposes automatic increases to the salary level each year.
Labor advocates and liberal lawmakers have long pushed a strong expansion of overtime protections, which have sharply eroded over the past decades due to wage stagnation and inflation. The new rule, which is subject to a publicly commentary period and wouldn't take effect for months, would have the biggest impact on retail, food, hospitality, manufacturing and other industries where many managerial employees meet the new threshold.
“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,” Acting Secretary of Labor Julie Su said in a statement.
The new rule could face pushback from business groups that mounted a successful legal challenge against similar regulation that Biden announced as vice president during the Obama administration, when he sought to raise the threshold to more than $47,000. But it also falls short of the demands by some liberal lawmakers and unions for an even higher salary threshold than the proposed $55,000.
Under the Fair Labor Standards Act, almost all U.S. hourly workers are entitled to overtime pay after 40 hours a week, at no less than time-and-half their regular rates. But salaried workers who perform executive, administrative or professional roles are exempt from that requirement unless they earn below a certain level.
The left-leaning Economic Policy Institute has estimated that about 15% of full-time salaried workers are entitled to overtime pay under the Trump-era policy. That's compared to more than 60% in the 1970s. Under the new rule, 27% of salaried workers would be entitled to overtime pay because they make less than the threshold, according to the Labor Department.
Business leaders argue that setting the salary requirement too high will exacerbate staffing challenges for small businesses, and could force many companies to convert salaried workers to hourly ones to track working time. Business who challenged the Obama-era rule had praised the Trump administration policy as balanced, while progressive groups said it left behind millions of workers.
A group of Democratic lawmakers had urged the Labor Department to raise the salary threshold to $82,732 by 2026, in line with the 55th percentile of earnings of full-time salaried workers.
A senior Labor Department official said new rule would bring threshold in line with the 35th percentile of earnings by full-time salaried workers. That's above the 20th percentile in the current rule but less than the 40th percentile in the scuttled Obama-era policy.
The National Association of Manufacturers last year warned last year that it may challenge any expansion of overtime coverage, saying such changes would be disruptive at time of lingering supply chain and labor supply difficulties.
Under the new rule, some 300,000 more manufacturing workers would be entitled to overtime pay, according to the Labor Department. A similar number of retail workers would be eligible, along with 180,000 hospitality and leisure workers, and 600,000 in the health care and social services sector.
A Senate bill unveiled on Wednesday looks to tackleonline safety for children by regulating Big Tech and social media platforms to deter users from content that can harm their mental health. Irene Ly, a policy counsel for the age-based ratings and review organization Common Sense Media, joined Cheddar News to break down the potential of the Kids Online Safety Act. "We can't be imposing such a big burden on parents to be doing it all on theirselves," Ly said. "I think you also have to keep in mind that parents often didn't grow up with social media, so they don't understand what it's like to be addicted to social media or really understand how they work."
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Season 13 "Shark Tank" contestant Tania Speaks secured a $400,000 deal for her Speaks Organic Skincare brand with "Shark" Mark Cuban while also being named one of the best pitches in the history of the show — all at 19 years old. Now 20, Speaks joined Cheddar News to talk about the skincare line, the clean beauty industry, and the moment that host Cuban was moved by her pitch. "I couldn't believe that he got emotional. I'm surprised I held back my tears that long," the young entrepreneur revealed. "It's just amazing for someone else to be inspired by your story, especially Mark Cuban himself."
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The recent 7.5% year-over-year increase in consumer prices is the highest since 1982, and drew some strong reactions from investors, with speculations that the Federal Reserve will hike interest rates by 50 points instead of 25. But other analysts believe that the Fed will stick with its original plan of 25 points next month. Chris Vecchio, Senior Analyst, at DailyFX broke down how the Fed could potentially react to the historically high inflation data.
