CBS News
Biden administration expands overtime pay to cover 4.3 million more workers. Here’s who qualifies.
About 4.3 million U.S. workers who previously didn’t qualify for overtime pay could soon receive time-and-a-half for working more than 40 hours a week thanks to a new rule from the Biden administration.
The U.S. Department of Labor on Tuesday unveiled a new rule that will extend overtime pay to salaried workers who earn less than $1,128 per week, or $58,656 annually. Previously, only workers who made $684 or less each week, or $35,568 annually, were eligible for OT.
Businesses are required to pay workers 1.5 times their pay if they work more than 40 hours a week, but that protection has been limited to hourly workers and lower-earning salaried employees. Because of the salary cutoff, many salaried workers were performing the same duties as their hourly coworkers, but weren’t able to qualify for overtime, Acting Labor Secretary Julie Su said in a statement.
“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,” she said.
The new rule could result in an additional $1.5 billion in pay for employees, according to an estimate from the Economic Policy Institute, a left-leaning think tank.
“Employers will be more than able to adjust to the rule without negatively impacting the overall economy,” wrote EPI director of government affairs and advocacy Samantha Sanders and President Heidi Shierholz.
Here’s what to know about the new OT rule.
Why is overtime pay getting overhauled?
The Fair Labor Standards Act requires that most workers who spend more than 40 hours a week on the job receive 1.5 times their regular pay for each hour they work beyond that amount.
While the law covers nearly all hourly workers, salaried employees only qualify for OT if they earn below a specific salary. Currently, that threshold is $684 per week, or $35,568 annually.
That means a salaried worker earning less than that cutoff “can be forced to work 60-70 hours a week for no more pay than if they worked 40 hours,” Sanders and Shierholz wrote. “The extra 20-30 hours are completely free to the employer, allowing employers to exploit workers with no consequences.”
Who is covered by the new overtime rule?
The law covers salaried workers who earn below certain thresholds, and it will kick in through two phases.
Starting July 1, salaried workers who earn less than $844 per week, or $43,888 per year, will be covered by the new rule. On January 1, 2025, the salary threshold will jump to $1,128 per week, or $58,656 per year, the Labor Department said.
Most of the additional workers who will now qualify for OT are in professional and business services, health care, and social services as well as financial activities, EPI said. About 2.4 million of the 4.3 million workers are women, while 1 million of color, it said.
Who won’t qualify for OT?
First, overtime pay isn’t available to salaried workers who are considered “executive, administrative or professional” employees.
Some researchers have pointed out that corporations give fake titles to low-ranking workers like “grooming manager” for a barber in order to make them appear like managers.
The new rule stipulates that only “bona fide” executive, administrative or professional employees are exempt from the expanded OT rule.
What are businesses saying about the new rule?
Some industry groups are pushing back against the overtime rule, saying that it will harm their operations and lead to job cuts. Some are also threatening legal action.
“We fear many hoteliers will have no option other than to eliminate managerial jobs that are long-established paths to advancement,” American Hotel & Lodging Association (AHLA) interim President Kevin Carey in a statement. “AHLA is reviewing all available options, including litigation, for defeating this ill-advised regulation.”
Watch CBS News
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.
Watch CBS News
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.
The Food and Drug Administration’s top vaccines official says he hopes to find common ground with Robert F. Kennedy Jr., who was picked Thursday by President-elect Donald Trump to head the Department of Health and Human Services.
“What I would ask of him is that he keep an open mind. We’re happy to try to show as much of the data as we can. And I think the data are essentially overwhelming, in certain areas, but we’ll just have to engage in the dialogue,” said Dr. Peter Marks, speaking at an event hosted by the Milken Institute in Washington, D.C., this week, ahead of Trump’s decision.
Kennedy has insisted that he is not “anti-vaccine” and has pledged not to ban vaccines under Trump. Instead, Kennedy has promised to “restore the transparency” around vaccine safety data and records that he accuses HHS officials of hiding.
Marks flatly rebuked Kennedy’s claims about the safety data.
“There’s no secret files. I mean, if they’re secret, I hold a security clearance. If they are secret from me then, they must be at some other level of classification,” he said.
Public health experts have objected to Kennedy’s long record of misleading statements questioning vaccine safety and worry he could upend decades’ worth of hard-fought wins in improving vaccination rates against deadly diseases.
The Center for Science in the Public Interest, a watchdog group that has often clashed with the FDA, likened the pick to “putting a Flat Earther at the head of NASA.”
Marks, a career civil servant who played a key role in launching the Trump administration’s Operation Warp Speed response to the COVID-19 pandemic in 2020, says he has “sat in the room” across from Kennedy when vaccines were discussed multiple times.
While he said he worries that spending time “re-litigating things that we know work” could undermine other important FDA efforts — and could be potentially deadly during a future pandemic if it further erodes confidence in vaccines — Marks also said that working with RFK Jr. could turn out to have a silver lining.
“Perhaps engaging in that dialogue, especially if it’s in a public venue, it may help. It may help bring some of the rest of the country along because sometimes as somebody is convinced, perhaps, maybe some of the rest of the country will be,” he said.
Greg Nash/The Hill/Bloomberg via Getty Images
Marks rejected Kennedy’s claims that the FDA is filled with corrupt officials who need to be fired, stressing that the staff is dedicated to protecting Americans’ health. Marks said he hopes to keep his job under Trump and Kennedy, and to protect the team at his center.
“They do what they do to protect the American people. Not for any kind of nefarious purpose. And during the COVID pandemic, people worked 14 hours a day,” Marks said of the agency’s staff.
Kennedy has vowed to end what he calls the agency’s “war on public health,” warning workers who are “part of this corrupt system” to “pack your bags.”
He has also specifically pledged to fire all of the nutritional scientists at the FDA and other agencies on his first day, accusing them of being co-opted by corporate interests.
“I look forward to working with the more than 80,000 employees at HHS to free the agencies from the smothering cloud of corporate capture so they can pursue their mission to make Americans once again the healthiest people on Earth,” Kennedy posted Thursday on X.
Asked about Kennedy’s scientific expertise, Marks said he thought Kennedy’s understanding is “not as deep as others,” but added, “I know a number of attorneys who know more than most PhDs and MDs about medicine. So it’s not the degree. It’s just a matter of keeping an open mind.”
While Kennedy’s pick for the role was just announced on Thursday, health officials have been bracing for the possibility for a while. During the campaign, Trump vowed he’d let Kennedy to “go wild” on health if he won.
“President Trump wants to see, has told me, he wants to see concrete, measurable diminishment in chronic disease within two years,” Kennedy said on Nov. 9.
Kennedy says he has called on Trump to declare an emergency to counter chronic disease, supercharging his authority to address what he sees as the root causes of the federal government’s failure to address rising rates of a range of ailments from autism to obesity.
“In order to do that, we need to operate very, very quickly. And we need to treat this with the same kind of urgency that we did, the COVID epidemic. This is a thousand times worse than COVID,” Kennedy said.