The salary threshold below which most white-collar, salaried workers are entitled to overtime pay will be twice as high.
Some 4.2 million Americans who currently don’t earn overtime pay will be entitled to it starting Dec. 1.
The U.S. Department of Labor announced today that the federal agency has finalized new regulations governing overtime pay.
The regulations increase the salary threshold below which most white-collar, salaried workers are entitled to overtime pay if they work more than 40 hours per week.
Currently, such workers earning less than $23,660 per year ($455 per week) are eligible for overtime pay. But come Dec. 1, those earning less than $47,476 per year ($913 per week) will be eligible.
According to information released by the White House this week, the 4.2 million people who will be affected by this change are expected to earn an additional $12 billion over the next decade.
Overtime protections were first established under the Fair Labor Standards Act of 1938, setting the general standard of time-and-half pay for any hours worked beyond 40 per week. The White House explains:
In general, all hourly employees are guaranteed overtime, and salaried employees are presumed to have the same guarantee unless they both: (1) make more than a salary threshold set by the Department of Labor, and (2) pass a test demonstrating that they primarily perform executive, administrative, or professional duties. A limited number of occupations are not eligible for overtime pay (including teachers, doctors, and lawyers) or are subject to special provisions.
Of the Americans who will benefit from the new overtime pay regulations, more than 2.3 million are women.
By age, the largest group that will benefit is workers in the age range of 35 to 54, representing more than 1.8 million people.
By education, the largest group that will benefit is people with a bachelor’s degree, representing more than 1.6 million.
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