Under a new rule unveiled on Tuesday, approximately 4.3 million salaried US workers who previously didn’t qualify for overtime pay could soon receive time-and-a-half for working more than 40 hours a week.
The US Department of Labor shared that the rule will extend overtime pay to salaried workers who earn less than $1,128 a week, or $58,656 annually.
The new standard is almost double what it was, as previously, only salaried workers who made $684 or less per week, or $35,568 annually, were eligible for time-and-a-half.
When workers work more than 40 hours a week, businesses are required to pay them 1.5 times their pay, but the protection has been limited to hourly employees and lower-earning salaried workers.
Acting Labor Secretary Julie Su shared in a press release that because of this rule, many salaried workers ended up doing the same duties as their hourly counterparts but didn’t benefit from overtime pay.
“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,” Su said.
An estimate from the Economic Policy Institute says that the new rule could result in an additional $1.5 billion in pay for employees.
“Employers will be more than able to adjust to the rule without negatively impacting the overall economy,” EPI director of government affairs and advocacy Samantha Sanders and President Heidi Shierholz shared in a statement.
Thanks to the new rule, Sanders and Shierholz wrote that salaried employees who were previously above the cutoff can no longer “be forced to work 60-70 hours a week for no more pay than if they worked 40 hours. The extra 20-30 hours are completely free to the employer, allowing employers to exploit workers with no consequences.”
The new rule won’t go into effect overnight.
The first comes on July 1, when salaried workers who earn less than $844 per week, or $43,888 per year, will begin to benefit. The second will start on Jan. 1, 2025, when the threshold jumps to $1,128 per week, or $58,656 per year, according to the Labor Department.