The Biden administration‘s Labor Department on Wednesday proposed a new rule that would raise the salary cap for receiving overtime pay, a move the agency says would grant millions more salaried workers time-and-a-half pay for every hour they work beyond 40 each a week.
The plan would lift the threshold for salaried workers to receive overtime pay to $1,059 per week, which is around $55,000 annually, and would make an estimated 3.6 million more salaried workers like restaurant and grocery store department managers eligible for the paycheck boost.
“For over 80 years, a cornerstone of workers’ rights in this country is the right to a 40-hour workweek, the promise that you get to go home after 40 hours or you get higher pay for each extra hour that you spend laboring away from your loved ones,” Acting Secretary Julie Su said in a statement announcing the proposal. “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.”
Su added, “Workers deserve to continue to share in the economic prosperity of Bidenomics.”
Under the current rules, salaried workers are required to be paid overtime if they make up to $35,568 or less, which has been the limit since the Trump administration raised it from $23,600 in 2019.
President Obama previously tried to raise the limit to $47,476, but a judge blocked the move in 2016 under pressure from states and businesses.
Biden’s proposal immediately received pushback, too. The American Hotel & Lodging Association issued a press release decrying the plan that would raise the minimum salary threshold on overtime for the second time in less than five years by over 50%.
“Small business owners continue to grapple with the rising costs of conducting business and inflationary pressures.,” AHLA president and COE Chip Rogers said in a statement. “If implemented, DOL’s proposal would result not only in crushing increases in labor costs for employers, but also significant tax hikes and administrative costs as well.”
Overtime pay typically applies to hourly workers and businesses often exempt salaried employees above a certain income level. However, the Labor Department sets a minimum salary level for overtime exemption.
FOX Business’ Matthew Kazin contributed to this report.