Millions extra Americans could become eligible for overtime pay.
The Biden-Harris administration announced a final rule Tuesday that raises the minimal wage threshold to qualify for time-and-a-half pay after 40 hours of labor in a week.
Proponents say the brand new restrict will imply lower-paid staff are pretty compensated for lengthy hours, and enterprise teams are anticipated to legally problem it.
Here’s what to know:
The new wage limits
Starting July 1, 2024, individuals earning lower than $43,888 per year, or $844 per week, can be eligible for overtime pay.
By Jan. 1, 2025, that wage threshold would enhance to $58,656 per year, or $1,128 per week.
The rule additionally consists of automated will increase to that wage eligibility stage each three years, beginning in 2027, to hold tempo with the altering labor market and wages.
The present wage threshold to qualify for overtime pay is $35,568 per year primarily based on a restrict set by the Trump administration in 2019 — the primary enhance since 2004.
More cash or time again to staff
Proponents say the brand new rule will guarantee individuals, notably in lower-paid roles, receives a commission for their time in the event that they work longer than a conventional workweek.
“Too often, lower-paid salaried workers are doing the same job as their hourly counterparts but are spending more time away from their families for no additional pay,” Acting Secretary of Labor Julie Su mentioned in a press launch.
It could additionally trigger companies to modify their procedures so individuals work fewer overtime hours, giving workers extra time again.
Who’s impacted
Overtime pay protections within the Fair Labor Standards Act say nearly all hourly staff qualify for 1.5 instances their pay after 40 hours labored in a week. The new Labor Department rule applies to salaried staff beneath a sure wage stage.
The overtime enhance is predicted to influence 4.3 million workers, 56% of whom are ladies and 24% of whom are staff of shade, in accordance to the left-leaning Economic Policy Institute.
Most staff impacted are employed in skilled and enterprise companies, well being care and social companies, and monetary actions.
Roughly 15% of salaried staff are at present entitled to overtime pay, and that can roughly double beneath the brand new wage limits. However, it’s miles decrease than the 60% of salaried staff who have been entitled to overtime pay within the 1970s, per the EPI.
Since then, the edge has not saved tempo with wage progress, consultants say.
More employee protections on the best way
Separately, the Federal Trade Commission issued a final rule Tuesday banning noncompetes, which proponents say will promote job-switching, greater wages, new companies and innovation.
A noncompete settlement is a contract the place an worker agrees to not be part of or launch a competitor after leaving a firm. The FTC estimates 30 million, or 18%, of U.S. staff are at present topic to a noncompete.
The company estimates the change will enhance the common employee’s earnings by $524 per year, decrease health-care prices by up to $194 billion over the subsequent decade and lead to a 2.7% bump in startups, or roughly 8,500 new companies per year.
The rule will become efficient 120 days after being printed within the Federal Register, although enterprise teams are anticipated to problem it.
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