Under a new rule announced by the White House Tuesday, anybody making a salary of less than $47,476 ($913 a week) will automatically qualify for overtime pay when they work more than 40 hours a week.
That's roughly double the $23,660 threshold (or $455 a week) that's currently in place.
The change -- which has been criticized as too drastic by many employers -- will go into effect on Dec. 1, 2016. It is intended to expand access to overtime pay for otherwise low-salaried workers who log long hours but have been treated as exempt from overtime because they perform some managerial duties.
Vice President Joe Biden characterized the changes as "restoring and expanding access to the middle class."
The percent of salaried workers automatically eligible for overtime has fallen to 7% from 62% in 1975. Under the new threshold, 35% of salaried workers will become automatically eligible, according to Labor Secretary Thomas Perez.
The new threshold will be updated every three years to make sure it stays at the 40th percentile of full-time salaries in the lowest income region of the country. Based on wage growth projections, that means it could rise to $51,000 by 2020.
And it could add $12 billion a year to paychecks. This is serious stuff folks. This is going to make a big difference in the lives of retail managers, IT workers, entry level office folks, and more. Going from 7% of salaried workers getting OT to 35% is a massive win for the working class, and the salary level for OT will keep place with inflation too.
I fully expect this to be challenged in court, and of course the second a Republican president gets into office you can kiss overtime pay goodbye.
But we'll see. At the very least, employers won't be forcing salaried workers to put in 60-70 hours a week with no OT anymore. Not unless they are making a significant wage to start with.