The Department of Labor has updated the rule that determines who is eligible for overtime pay, raising the salary threshold from the current $23,660 to $47,476 a year. That means any salaried worker who makes up to $47,476 is guaranteed time-and-a-half pay for all hours worked over 40 in a week, regardless of their job title or duties. The new rule will directly benefit 12.5 million salaried workers, most of whom will be newly eligible for overtime. Importantly, it will disproportionately affect young workers, who are just starting out in their careers.
Only 2.0 million salaried millennials (age 16–34) were covered by the old overtime salary threshold. Raising the salary threshold to $47,476 will directly benefit an additional 4.5 million millennials, with most of them gaining eligibility for overtime for the first time—bringing the number of millennials covered by the overtime salary threshold to 6.5 million. While millennials make up 28.2 percent of the total salaried workforce, they represent 36.3 percent of the 12.5 million salaried workers directly benefiting from the higher overtime threshold.
4.5 million millennials will directly benefit from the new overtime rule: Number of workers age 16–34 covered under old and new overtime salary threshold, 2016
| Covered under old threshold | Covered under new threshold | |
|---|---|---|
| Old threshold | 2,001,000 | |
| New threshold | 2,001,000 | 4,535,000 |
Note: The sample reflects salaried (nonhourly) workers who are subject to the Fair Labor Standards Act (FLSA). This excludes certain groups of workers such as the self-employed, most federal workers, religious workers, many agricultural workers, and many transportation workers. The estimates consider all the workers who directly benefit from the federal salary threshold increase alone, and do not include a subset of salaried California and New York workers already covered by state thresholds higher than the old federal threshold.
Source: EPI analysis of the U.S. Department of Labor's proposed (July 6, 2015) and final (May 18, 2016) rule, "Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees," 29 CFR Part 541; and Current Population Survey Outgoing Rotation Group microdata, 2015