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Though much of the political world’s focus this week has been on Donald Trump and his extraordinary legal difficulties, it’s been an exceedingly productive week for President Joe Biden and his administration. The incumbent Democrat and his team have advanced a series of key policy priorities in recent days, touching on everything from climate change to air travel, non-compete clauses to residential solar projects.
But the Biden administration’s new policy on overtime pay was of particular interest for a few reasons. Reuters reported this week:
The administration of U.S. President Joe Biden on Tuesday unveiled a rule extending mandatory overtime pay to an estimated 4 million salaried workers, going even further than an Obama-era rule that was struck down in court. The U.S. Department of Labor rule will require employers to pay overtime premiums to workers who earn a salary of less than $1,128 per week, or about $58,600 per year, when they work more than 40 hours in a week.
It’s been several years since we last talked about this, so let’s quickly recap how we arrived at this point.
In the latter half of Barack Obama’s presidency, the Democrat realized that congressional Republicans would never agree to raise the minimum wage, so he and his team explored other ways to put a little extra money in American workers’ pockets. In time, overtime pay eligibility became a key priority for the White House’s economic agenda.
This might sound a little wonky, but it’s relatively straightforward. Under existing labor laws, millions of workers earning below a certain income threshold are eligible for overtime pay when their workweek exceeds 40 hours. In Obama’s second term, that threshold was $23,660.
The Democratic president doubled it to $47,476, and in the process, Obama extended overtime rights to more than 4 million workers who would otherwise not be eligible to receive it. The same policy included cost-of-living increases to keep up with inflation. HuffPost at the time described it as “one of the most ambitious economic reforms of the Obama era.”
It did not, however, last. As a Vox report explained in 2019, “Powerful businesses groups freaked out. Then they joined 21 Republican-controlled states to sue the administration before the rule went into effect in 2016. The rule was put on hold during the legal dispute. A federal judge in Texas invalidated it in 2017, arguing that the Labor Department didn’t have the authority to make such a drastic change.”
Donald Trump — the alleged populist with a deep concern for working-class Americans — unveiled an alternative that dramatically scaled back Obama’s policy: The Republican administration raised the income threshold to $35,000, instead of $47,476, and scrapped cost-of-living increases altogether.
Biden is reversing Trump’s reversal and going even further than Obama, moving the new eligibility threshold to $58,600 per year. As Acting Labor Secretary Julie Su emphasized, the new policy also “establishes regular updates to the salary thresholds every three years to reflect changes in earnings. This protects future erosion of overtime protections so that they do not become less effective over time.”
Obviously, what matters most are the benefits millions of American families will soon feel. But as the 2024 presidential campaign advances, and voters are asked to consider which candidate does more to look out for workers, keep this story in mind.
This post updates our related earlier coverage.