The new labor laws under the Biden Administration will qualify millions of additional workers for overtime pay if they work more than 40 hours a week. Under the current system, workers earning up to $35,568 are eligible for compensation and half for overtime over 40 hours. However, the number will soon be $58,656, impacting millions of workers. The new law also covers loopholes that may have saved businesses as much as $4 billion in overtime annually.
The application of this change will take place in phases. In the first phase, people earning up to $43,888 will be eligible for overtime on July 1, 2024. People earning up to $58,656 will qualify for the benefit on July 1, 2025. 3.5 million people are expected to benefit from the change. The law also stipulates that the limits be automatically updated every three years. The law also allows these overtime payments to managers who were previously excluded. People with low-paying jobs were given managerial roles to avoid such fees, but this will no longer be the case.
The labor department has had enough of a silent role in the matter, and it now plans to take matters into its own hands. The department is now ensuring that the exploitation is controlled. “This rule will restore the promise to workers that if you work more than 40 hours in a week, you should be paid more for that time,” Acting Labor Secretary Julie Su said in a statement. “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. That is unacceptable.”
As expected, the workers are rejoicing at the change. However, business owners are less enthusiastic since they see the additional cost of doing business. Some have called the measure extreme. However, this is not the first time such a change has been made recently. The Obama Administration raised the limit to $47,000 before a lawsuit reversed it in 2017.
The change in law will surely help many households lead a better life. Many businesses have benefited from the legal loopholes in the past, and it is time for the workers to get their due share.
