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New proposal would expand who is eligible for overtime pay to millions of workers

Macy's cosmetics employees
A new rule would extend overtime pay to millions of salaried workers.

A proposed change in overtime pay rules that would make millions of more workers eligible for overtime pay would have a big impact on the retail and food industries.

The proposal, issued by the Labor Department, updates the Fair Labor Standards Act rules for executive, administrative and professional employees. It would make 3.6 million additional salaried workers eligible for extra wages, according to the Department. 

The proposed regulation would require employers to pay overtime to salaried workers who are in professional, administrative and professional roles but make less than $1,059 a week, or about $55,068 a year for full-time employees.  The current  salary threshold is $35,568, which has been in place since 2019 when it was raised during the Trump Administration.

In another big change, the new regulation would also automatically update the salary threshold every three years to reflect current earnings data.

Under the new rule, some 300,000 retail workers would be eligible, along with 180,000 hospitality and leisure workers, the AP reported

“For too long, many low-paid salaried workers have been denied overtime pay, even though they often work long hours and perform much of the same work as their hourly counterparts,” said Principal Deputy Wage and Hour Division Administrator Jessica Looman. “This proposed rule would ensure that more workers receive extra pay when they work long hours.”

The  new rule, which is subject to a publicly commentary period and wouldn't take effect for months,  is likely to  face pushback from business groups.  The National Retail Federation issued a statement in which it hinted at legal challenges.

“While we are reviewing the impact of this proposal with our members, the proposed number is significantly higher than the rate of inflation,” stated NRF senior VP of government relations David French. “Further, the attempt to tie the hands of future administrations through automatic increases exceeds the Department’s authority.”

Upon publication in the Federal Register, the notice of proposed rulemaking will be open for public comment for 60 days. The department will consider all comments received before publishing a final rule. Learn more about the proposed rule and instructions for submitting comments.




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