DOL is Reviewing Overtime Pay Threshold

During testimony before the House Committee on Education and Labor on June 9, 2021, Secretary of Labor Marty Walsh told lawmakers that the DOL is reviewing the current overtime pay threshold that he said is too low and should be subject to automatic and regular updates.

Currently, the overtime threshold is $684 per week, or $35,568 annually. Workers who earn below the threshold amount are required to be paid overtime, even if they are classified as managers or professionals.

Under the former Obama administration, the DOL finalized a rule that would have raised the threshold to the 40th percentile of earnings for full-time salaried workers nationwide ($47,476) with automatic updates to the threshold every three years. A Texas federal court struck down the rule in 2017 and it was never implemented.

In a March 25, 2021, letter to Walsh, Representatives Mark Takano (D-CA), Alma Adams (D-NC), Bobby Scott (D-VA), and Senator Sherrod Brown (D-OH), urged the DOL to begin the process to update the salary threshold:

“Even before the pandemic, our nation’s weakened labor standards, including an out-of-date federal minimum wage and inadequate overtime pay standards, left too many workers unable to earn enough to provide for themselves and their families. The pandemic has only underscored and exacerbated these conditions. Many workers, including essential workers, are overworked and underpaid. Other workers struggle to work enough hours to make ends meet. These workers deserve a raise.”

The letter further urged the DOL to “adopt a salary threshold in line with the historical high point of salary thresholds—the 55th percentile of earnings of full-timed salaried workers nationwide. This threshold would be at least $82,732 by 2026. We also suggest DOL include annual automatic updates to prevent erosion of the salary threshold over time.”

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