A rule change being proposed by the Labor Department would make salaried employees earning less than $55,000 eligible for overtime compensation.
Labor Department Proposes Significant Increase in Overtime Pay Threshold
At the moment, salaried employees who earn less than $35,568 annually are entitled to overtime pay. That threshold would rise to $55,000 under the DOL’s proposed rule.
An estimated 3.6 million paid workers would be impacted by the move.
The adjustment is required, according to the DOL. to guarantee that salaried employees receive just compensation for their labour.
“The overtime threshold in place now is obsolete. And does not take into account the cost of living,” said Julie Su, acting secretary of labour. The millions of salaried workers who would benefit from this proposed law would be fairly compensated for their labour.
The proposed rule change has not yet been finalised and is still in the proposal stage. It would go into effect in January 2024 if it were to be finalised.
Mixed responses have been given to the proposal. Some companies have expressed worry that the adjustment may raise their costs. Some people have embraced the shift. claiming that doing so will help level the playing field for paid employees.
Proposed Overtime Pay Rule Change
Until September 1, 2023, the DOL will take public comments on the proposed rule change.
The finalisation of the regulation change would be a significant triumph for proponents of workers’ rights. The manner would also be significantly altered. In the US, such overtime pay is calculated.
The following are some potential advantages of the rule change:
- It would guarantee that salaried workers making less than $55,000 receive just compensation for their efforts.
- It would assist in levelling the playing field for hourly and paid employees.
- By putting more money in the pockets of workers, it might stimulate the economy.
However, there are a few potential negative effects of the rule change as well:
- It can raise expenses for companies, which might result in job losses.
- It can become more challenging for corporations to compete with international firms.
- It can put off employers from bringing on paid staff.
These possible advantages will need to be considered by the DOL. And downsides prior to putting the regulation change into effect.
