The Biden administration has finalized a new rule set to make millions of additional salaried workers eligible for overtime pay in the U.S., the Associated Press reports.
The move marks the largest expansion in federal overtime eligibility seen in decades. Starting July 1, employers will be required to pay overtime to salaried workers who make less than $43,888 per year in certain executive, administrative, and professional roles. That cap will then rise to $58,656 by the start of 2025.
The news marks a significant jump from the current overtime eligibility threshold of $35,568, which was set under the Trump administration in 2019.
Under the federal law, nearly all hourly workers in the U.S. are entitled to overtime pay after 40 hours a week, but many salaried workers are exempt from that requirement — unless they earn below a certain level.
The new rule also expands overtime eligibility for some highly-compensated workers. The current $107,432 annual threshold for highly-compensated workers is set to increase to $132,964 on July 1 and $151,164 by the start of 2025.
The Labor Department estimates that 4 million lower-paid salary workers who are exempt under current regulations will become eligible for overtime protections in the first year under the new rule. An additional 292,900 higher-compensated workers are also expected to get overtime entitlements.
