Overtime Overhaul: Biden’s Bold Move to Boost Workers’ Wages

In a landmark move echoing the voices of progressive values, the Biden administration dropped some major news just before Labor Day: a massive extension of federal overtime protections. And guess what? If this sails through, it’s going to be a game-changer for millions of hardworking Americans.

The nitty-gritty? The Department of Labor aims to increase the salaried worker threshold for guaranteed overtime pay from a somewhat measly $35,568 to a more substantial $55,000 annually. But here’s the genius twist – this threshold will undergo an automatic update every three years. No more stagnancy, and no more forgetting the working class, regardless of who’s in the White House.

This isn’t just a minor change. We’re talking about 3.6 million more workers stepping into the circle of overtime protections. That translates to a collective wage increase of around $1.3 billion.

Acting Labor Secretary Julie Su voiced the sentiments of countless workers: many find themselves working insane hours without seeing a dime of extra pay. This move is about acknowledging the sweat and blood of the American worker. In Su’s words, it’s about “restoring workers’ economic security.”

For context, the Fair Labor Standards Act will now guarantee many more workers pay at one-and-a-half times their standard rate for anything over a 40-hour work week. Yes, Obama tried to push this envelope earlier (aiming for just over $47,000), but thanks to opposition from business lobbies and Trump’s alternate plan in 2019, it couldn’t make the cut.

Now, although the proposed rule doesn’t guarantee overtime for salaried workers earning above the threshold, it does mark a significant bump – raising the fraction of salaried workers with guaranteed overtime from 15% to 27%.

For those keeping score, our progressive champions in Congress had been rallying for an even bolder move. A year ago, the Congressional Progressive Caucus nudged Biden to target the 55th percentile of full-time salaried workers. They aimed for a threshold of $82,732 by 2026. If you’re curious, this would match (and even outdo) the original 1949 limit, which would be worth over $65,000 today.

But, let’s not miss the forest for the trees. Advocates are giving this proposal a thumbs-up. As Heidi Shierholz of the Economic Policy Institute put it, this could redress a nearly 50-year neglect, giving millions their due under the Fair Labor Standards Act and forging a path towards a “stronger, fairer economy.”

As millennials and Gen-Z folks, we understand the struggles of work-life balance, economic equity, and fair compensation. This move is right up our alley. Time to keep a keen eye on this and ensure it crosses the finish line!