With the upcoming U.S. presidential election in November, the Joe Biden administration has expanded the eligibility for overtime pay in an effort to win workers' votes.
On the 23rd (local time), the U.S. Department of Labor announced a final rule raising the salary threshold for overtime pay from the current $35,568 (approximately 48.94 million KRW) to $43,888 (approximately 60.38 million KRW) starting July 1. Additionally, the threshold will increase to $58,656 (approximately 80.71 million KRW) from January next year.
The Department of Labor plans to adjust the standard every three years based on wage statistics and other data.
Accordingly, starting January next year, workers earning less than $10,128 weekly or $58,656 annually who work more than 40 hours per week will receive 1.5 times their regular pay for overtime hours.
Even workers earning above the threshold can receive overtime pay if they are not in managerial positions, but those earning above a certain amount will be excluded. The Department of Labor also raised the exemption threshold for overtime pay eligibility from the current $107,432 (approximately 147.82 million KRW) to over $152,000 (approximately 209.15 million KRW).
According to foreign media, about 4 million workers are expected to benefit from this measure.
The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) welcomed the move, calling it a restoration of protections for overtime pay.
However, U.S. media outlets believe this measure is likely to face lawsuits similar to those during the Obama administration. In 2016, the Obama administration’s Department of Labor raised the overtime pay threshold to $47,000, double the previous amount, but the Texas federal court blocked it. The current salary threshold was set during the Trump administration in 2020.
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