Following the issuance of new rules by the Biden administration that allow many salaried workers to receive overtime pay, the Department of Labor will raise the minimum salary threshold for exempt employees from $35,568 per year to $43,888 per year on Monday.
This threshold is temporary, as it will increase to $58,656 on Jan. 1, 2025.
Generally, employers must pay nonexempt workers their regular hourly wage plus 50% for any work exceeding 40 hours in a week. With the updated thresholds, individuals earning less than $58,656 will qualify for overtime pay in 2025.
“This means increased income and more quality time with loved ones for millions of Americans. While Republicans may support big corporations and special interests, I stand with working families, like those I grew up with in Scranton,” President Joe Biden stated on Monday.
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The Department of Labor exempts executive, administrative, and professional employees (including teachers and academic administrative personnel in elementary and secondary schools); outside sales employees; and certain computer-related occupations from overtime if they are paid $844 a week, which amounts to $43,888 annually.
The new rule also impacts some salaried employees earning six figures annually. Previously, workers in other fields were exempt from overtime if they earned $107,432 yearly. Effective July 1, the threshold increased to $132,964 per year. By Jan. 1, 2025, this amount will rise to $151,164 annually.
The White House estimates that 1 million workers will be affected by the changes made on Monday.
