Labor Division proposes far-reaching extension of extra time entitlements

In a transfer that might have an effect on tens of millions of employees, the Biden administration introduced Wednesday that it’s proposing to considerably elevate the restrict beneath which most employees mechanically obtain time-and-a-half extra time pay.

Underneath the Labor Division’s proposed rule, the restrict for receiving extra time pay after 40 hours per week would improve from about $35,500, a stage set throughout the Trump administration, to about $55,000 per yr.

About 3.6 million staff who fall between the present and new limits would successfully be eligible for extra time pay beneath the proposed rule, the division mentioned. Some employers might select to boost worker wages above $55,000 to keep away from extra time.

Julie Su, the ministry’s performing secretary, mentioned in a press release that the rule would “assist restore employees’ financial safety by giving tens of millions extra employees the precise to extra time safety.”

Some trade teams, notably in retail, meals service and hospitality, have argued that expanded extra time insurance policies may lead many employers to transform some staff to hourly employees and scale back their hourly wages to maintain their general wages unchanged.

These teams argue that considerably increasing extra time eligibility might additionally deter employers from selling employees to lower-management positions that pave the way in which to well-paying careers, as extra employers could be pressured to pay junior employees extra time in the event that they work lengthy hours work.

The proposal follows a equally formidable transfer by the Obama administration in 2016, which aimed to boost the extra time restrict for many staff from about $23,500 to $47,500. However shortly earlier than Donald J. Trump took workplace as president, a federal decide in Texas struck down the Obama rule, concluding that the federal government lacked the authorized authority to boost the extra time restrict so considerably.

Later, the Trump administration launched the present extra time restrict of about $35,500.

Underneath the Biden administration’s proposal, the extra time restrict would mechanically modify each three years to maintain tempo with rising earnings.