Approximately 43 million U.S. workers are classified as “exempt” under the Fair Labor Standards Act (FLSA), meaning they are not entitled to overtime pay when working in excess of 40 hours in a work week. For a worker to be exempt, he/she must perform certain duties and be paid a salary above a certain threshold. In an effort to expand overtime eligibility to millions more workers, the Department of Labor (DOL) under the Obama administration proposed to more than double the then-current $23,660 per year eligibility threshold. A coalition of 21 states and numerous business associations challenged this proposal in federal court. The court ultimately blocked the increase and it remained blocked as the Trump administration took office, which did not support the Obama era increase but recognized that some change was necessary to keep pace with economic reality. The Trump administration withdrew the 2016 proposal and proposed a lesser increase to $35,563, which was adopted in March 2019.
President Biden touted increasing the salary threshold throughout his presidential campaign. Biden’s DOL may seek to increase the threshold even greater than the 2016 proposal under Obama. Obviously, the higher the threshold, the more workers whose salaries fall below the threshold and become eligible for overtime pay. That all of them are potential voters is not lost on the administration.