The salary threshold for workers to qualify for overtime pay will double to $47,476 by December 2016, but the new rule has faced opposition

More than four million working Americans could get a bigger paycheck by the end of the year, thanks to a new overtime rule to be finalized by the US Department of Labor on Wednesday.

Previously, only salaried workers who earned below $23,660 were eligible for overtime pay. As of December 2016, that threshold will double and be set at $47,476 a year.

“If you work overtime, you should actually get paid for working overtime,” vice-president Joe Biden said. People who work more than 40 hours a week should be paid time and a half of their regular wages for the extra time. “In 1975, 62% of workers automatically qualified for overtime. Today, that’s 7%. Not a mistake, 65 to 7 – and you wonder why the middle class is struggling.”

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US secretary of labor Tom Perez said the current salary threshold is “woefully out of date” and that had it kept up with inflation, it would have been close to $57,000 a year by now. The rule was last updated 12 years ago.

In future, the threshold will updated every three years. The labor department expects that due to such adjustments the threshold will grow to more than $51,000 by January 2020.

“More than four million workers are either going to get paid more or get their time back to raise their family, go back to school or retrain to get a better job,” said Biden. The Obama administration predicts that the workers who will benefit from the new rule, such as retail manager and book keepers, will earns as much as $12bn more in higher wages over the next decade.

Not everyone, however, believes that the new rule will help US economy move forward.

In an attempt to block the new overtime rule from taking effect, Republicans in Congress led by South Carolina senator Tim Scott and Michigan congressman Tim Walberg have proposed a new bill that would require US labor secretary Tom Perez to carry out additional analysis on how the new rule would affect small businesses and their employees.

“The Obama administration’s decision to drastically redefine overtime will hurt our workforce and our employers. It will lead to reduced hours, confusion for job creators, and will limit growth opportunities for employees,” Scott said in March, when he introduced the bill in Congress.

A coalition of more than a dozen organizations, including Americans for Prosperity and Competitive Enterprise Institute, penned a letter to the US congress on Tuesday in support of the bill.

“We write to express our strong support for the Protecting Workplace Advancement and Opportunity Act, and all efforts to defund, block and otherwise nullify the Obama Administration’s effort to change our nation’s overtime rules,” they wrote.

On a call with reporters, Perez pointed out that prior to finalizing the rule the Obama administration listened to more than 270,000 public comments, many of which came from the US businesses.

As a compromise, he said, the labor department made no changes to the “duties test” and allowed bonuses and incentive payments to count toward up to 10% of the new salary level. The “duties test” is a set of requirements that salaried workers must meet in order to be exempt from overtime pay. For example, it is not enough to just be classified as manager or a supervisor. These managers must actually be in charge of two or more full-time employees during a fraction of their work week in order to be exempt.

Biden and Perez both pointed out that some US workers are misclassified as supervisors and miss out on overtime pay. Perez pointed out that when he was growing up, being a manager was a good job that meant being middle class. Managers worked long hours but were compensated for it.

“These good paying middle class jobs were not a fluke brought about by an invisible market forces. They were good paying middle class jobs by design,” he said. While the White House won’t adjust the duties test, it is clarifying it in hopes of expanding overtime pay to more workers. According to Perez, there are an estimated 750,000 workers who are incorrectly classified as overtime exempt.

The rule will go into effect on 1 December and the US labor department will immediately “pivot” to compliance assistance in order to help US businesses to meet its requirements by that time.

“We don’t go out there with our ticket books trying to play the gotcha game,” Perez said on Tuesday. “We want to work together with employers.”