New federal rule extends overtime pay to more employees
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Under the new rule, salaried workers who earn less than $35,568 per year will be eligible for time-and-a-half overtime pay, effective January 1, 2020. The current threshold for overtime pay is $23,660, which has been in effect since 2004.
The new rule will affect about 1.3 million workers. In 2016, the Obama administration raised the threshold to about $46,000, which would have made nearly 5 million workers eligible for overtime. (It also would have indexed the level to wage growth and adjusted it every three years.). But the rule was struck down by a federal judge in Texas after being challenged by some states and business groups and never took effect.
“This rule brings a common-sense approach that offers consistency and certainty for employers as well as clarity and prosperity for American workers,” acting labor secretary Patrick Pizzella said in a statement.
However, labor and workers’ rights advocates criticized the ruling, deeming it inadequate in its reach. It also does not include a provision to regularly increase the threshold
“While the administration may be trumpeting this rule as a good thing for workers, that is a ruse,” said Heidi Shierholz, director of policy at the Economic Policy Institute. “In reality, the rule leaves behind millions of workers who would have received overtime protections under the much stronger rule, published in 2016, that Trump administration abandoned.”