As anticipated, the Department of Labor has issued a new overtime rule that raises the salary threshold below which most white collar salaried workers are entitled overtime to: $913 per week, or $47,476 annually for a full-time worker, from $455 per week, or $23,660 annually.

The updated rule, which was issued Tuesday and will take effect Dec. 1, 2016, will affect 4.2 million workers, according to the department.

Among other provisions, the salary threshold will be updated every three years. The threshold will be maintained at the 40th percentile of full-time salaried workers in the lowest income region of the country. Based on projections of wage growth, this means the threshold is expected to rise to more than $51,000 with the first update on Jan. 2, 2020, according to the Department of Labor.

The rule also permits bonuses and incentive payments to count toward up to 10% of the new salary level.

“Companies will have a choice,” said Vice President Joe Biden in a statement. “Pay their workers for the extra hours they put in, or cap their hours at 40 hours a week.

“From over 4 million workers, this changes means they'll either get a bump in pay or will get more time with their families if they work more than 40 hours a week. Or more time to go back to school or get additional job training.”

Labor Secretary Thomas Perez said in a statement that while in 1975 62% of full-time salaried workers were eligible for overtime protection based on their pay, today only 7% are eligible.

The rule was criticized by Tom Santos, vice president of federal affairs for the Washington-based American Insurance Association, who said it will have negative consequences for both employees and employers in the insurance industry.

“The rules finalized today will not provide the workplace flexibility sought by employers and employees alike,” said Mr. Santos. “We believe that this rule will result in a scramble to reclassify employees that will ultimately undermine job security and future opportunities for employees.”

However, Allan S. Bloom, a partner with Proskauer Rose L.L.P. in New York, said the rule “is much better than expected from an employer standpoint.” One reason is the rule's implementation has been delayed until Dec. 1, “which is months after we expected,” said Mr. Bloom. “It gives employers plenty of time to figure out how they're going to come into compliance with the new rule.”

In addition, providing increases every three years is better than providing for an annual increase, which was anticipated, and is welcome, he said.

Mr. Bloom said it is also positive that bonuses can account for 10% of the threshold, which was “totally unexpected.” While there had been some discussion of this, it had not been expected to make the final rule, Mr. Bloom said. “It's as good as it gets,” he said.

“There are a number of ways employers can look to recover” increased costs, including reducing benefits, he said.

“The rule is not as bad as it could have been, but it's still not good,” said Alexander J. Passantino, a partner with Seyfarth Shaw L.L.P. in Washington, who is former acting administrator of the Labor Department's wage and hour division.

Mr. Passantino said one problem he has with the rule is the threshold salary has increased “way too high, too fast. It could have been phased in over a longer period of time. It think that would have made a lot more sense.”

“Employers are going to have to react and there are employers who don't have the ability” to do so, including state and local governments who cannot immediately generate more tax revenue, Mr. Passantino said.