US government raises salary threshold for overtime pay


The US government has extended the salary threshold for overtime pay eligibility.

The change forms part of a new overtime rule, which has been finalised by the US Department of Labor.

This raises the overtime salary threshold from $455 a week (£312) to $913 a week (£625). This is equivalent to $47,476 a year (£32,512). This means that any employee who earns less than this amount will be eligible for overtime pay if they work over 40 hours a week.

The new rule will come into effect on 1 December 2016, and the salary threshold will be automatically updated every three years.

The rule aims to boost wages for US employees, extend overtime protections for salaried workers, and modernise overtime regulation.

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President Barack Obama (pictured) said: “Forty years ago, more than 60% of workers were eligible for overtime based on their salaries. But today, that number is down to 7%.

“We’re more than doubling the overtime salary threshold. And what this means is, most salaried workers who earn less than about $47,500 a year will qualify for overtime. Or, their employers can choose to give them a raise so that they earn more than $47,500. Or, if employers don’t want to raise wages, they can let them go home after 40 hours and see their families or train for new jobs. Any way you slice it, it’s a win for working families.”