Biden Administration Proposes $55k Salary Threshold for Overtime Pay, Raising Concerns
The Biden Administration has put forward a proposal to increase the salary threshold for overtime pay, potentially making 3.6 million more American workers eligible. Under the new rule, most salaried workers earning less than $55,000 per year would be guaranteed overtime pay. This marks a significant jump from the current threshold of $35,568 annually.
Not surprisingly, the proposal has raised concerns among business leaders. Scott Manley, Executive Vice President of Government Relations for Wisconsin Manufacturers and Commerce, highlighted the potential expenses associated with this change. He stated that the Biden Administration’s estimate of over a billion dollars would likely be an underestimation.
According to ZipRecruiter, the average salary in Wisconsin is $50,277 per year, which translates to $24 per hour. Manley expressed worries about the impact on businesses and consumers. He believed that companies would have to increase prices to cope with the additional expense of overtime pay.
The proposed rule aims to ensure fair compensation for workers. Principal Deputy Wage and Hour Division Administrator Jessica Looman emphasized the importance of paying low-paid salaried workers for their long hours and the comparable work they perform to their hourly counterparts.
However, critics like Manley warn that implementing this proposal could lead to negative consequences. They anticipate that businesses will respond by cutting workers’ hours and even eliminating jobs. Manley raised the point that a similar proposal under the Obama Administration was blocked by a federal court in 2017, ruling that it exceeded the president’s legal authority.
Governor Tony Evers, when asked about his opinion on the new proposal, stated that he had yet to consider it. Nonetheless, he acknowledged the need for increasing resources to attract skilled workers in the healthcare industry.
The notice of the proposed rule making will be available for public comment for 60 days once published in the Federal Register.
As with any major policy change, the proposed increase in the overtime pay salary threshold comes with advantages and concerns. While it aims to provide fair compensation for long hours worked by salaried workers, critics worry about the potential financial burden on businesses and the possibility of job cuts. With public comment on the proposal ahead, its future remains uncertain.
