Some employees, including 1.2 million middle class workers, could be overtime eligible starting in January under a new policy by the Trump administration.
According to the Department of Labor, executive, administrative, or professional employees who make less than $684 a week ($35,568 a year) will now be eligible for time-and-a-half pay for work performed beyond 40 hours in a week. That is an increase from $455 a week ($23,660 a year).
While the Department of Labor says the new rule is the first time the threshold for overtime eligibility has increased in 15 years, the Obama administration attempted to increase the overtime threshold $47,476 a year. The rule, which had the opposition of then candidate Donald Trump, was shot down by the courts after Obama left office. Obama’s policy was not defended in federal court by the Trump administration.
The policy also increases the threshold for workers known as “highly compensated employees.” The threshold increased from $100,000 to $107,432 per year. Those who are considered highly compensated employees are exempt from overtime pay.
The Labor Department said it expects nearly 1.3 million workers will be eligible for overtime who currently aren’t eligible. Of the 1.3 million workers, 100,000 will become overtime eligible after the highly compensated employee threshold increases.
“For the first time in over 15 years, America’s workers will have an update to overtime regulations that will put overtime pay into the pockets of more than a million working Americans,” Acting U.S. Secretary of Labor Patrick Pizzella said. “This rule brings a commonsense approach that offers consistency and certainty for employers as well as clarity and prosperity for American workers.