Restoring Overtime Pay Act of 2026
The Restoring Overtime Pay Act of 2026 would amend the Fair Labor Standards Act to raise the salary level that white-collar employees must meet to remain exempt from federal overtime rules. The bill sets a phased-in minimum salary threshold for executive, administrative, and professional employees at $45,000 initially, then increases it to $55,000 in 2027, $65,000 in 2028, and $75,000 in 2029. Beginning in 2030, the threshold would be tied to the 55th percentile of weekly earnings for full-time salaried workers nationwide, based on Bureau of Labor Statistics data.
The bill also authorizes the Secretary of Labor to set an even higher threshold through notice-and-comment rulemaking and requires automatic annual updates thereafter, without additional rulemaking, to keep the threshold aligned with wage data. In addition, the Bureau of Labor Statistics would be required to publish quarterly earnings data by census region to support the update mechanism. The effective date would be the first day of the third month after enactment.
Beyond the salary test, the bill tightens the duties test for the executive, administrative, and professional exemptions. It would reduce the amount of nonexempt work allowed under the retail or service establishment exemption and narrow the type of duties that can qualify for exemption, making it harder for employers to classify lower-paid workers as exempt from overtime.
The bill’s impact would be to expand overtime eligibility for many salaried workers by raising the compensation floor for exemption and by limiting the duties-based exemption. Employers in retail, service, administrative, and professional sectors would likely face higher payroll costs and may need to reclassify employees, adjust salaries, or pay overtime more broadly. The measure would directly amend federal labor law and would affect Department of Labor enforcement and BLS reporting obligations.
The available context shows a generally supportive posture from the bill’s sponsors, who frame it as restoring overtime pay protections. No committee debate or recorded votes are provided, so there is no documented opposition in the supplied materials. The main likely point of contention, based on the bill’s structure, is the higher labor cost and compliance burden for employers versus the benefit of broader overtime coverage for workers.
The bill would amend Section 13 of the Fair Labor Standards Act of 1938 to change the federal overtime exemption for bona fide executive, administrative, and professional employees. It establishes a new salary threshold schedule, creates an automatic indexing mechanism tied to BLS wage data, authorizes the Secretary of Labor to set a higher threshold through rulemaking, and requires quarterly publication of earnings data. It also narrows the duties test for the exemption, which would likely increase the number of salaried workers covered by overtime protections and require employers to adjust classification and pay practices.
Based on the bill text and sponsorship, the overall sentiment appears favorable among its supporters, who present the measure as a worker-protection and wage-restoration bill. The context provided does not include committee testimony, amendments, or votes, so there is no recorded bipartisan or partisan debate in the supplied materials. The bill’s title and structure suggest a pro-labor objective, while the absence of opposition statements leaves the level of controversy undocumented in the record provided.
The most likely point of contention is the size and pace of the salary-threshold increases, which would significantly expand overtime eligibility and raise employer labor costs. Employers, especially in retail, service, and administrative sectors, may object to the compliance burden and the automatic update mechanism that removes the need for future rulemaking. Another likely dispute is the tightened duties test, which would make it harder to classify employees as exempt even when they perform some managerial or professional tasks. Supporters would likely emphasize wage gains and stronger overtime protections for workers.