Restoring Overtime Pay Act of 2026

Key Points

• The bill raises the salary threshold that determines who qualifies for overtime pay in four steps: $45,000 when it takes effect, $55,000 in 2027, $65,000 in 2028, and $75,000 in 2029. This would make millions more salaried workers eligible for time-and-a-half pay when they work more than 40 hours a week.
• Starting in 2030, the salary threshold will automatically update every year to match the 55th percentile of weekly earnings for full-time salaried workers nationwide. This means the threshold keeps pace with wages without needing Congress to pass a new law each time.
• The bill limits how much non-exempt work a salaried manager can do before they must be paid overtime. If someone spends 20% or more of their time on tasks that are not directly related to executive or administrative duties, they would qualify for overtime pay regardless of their salary.
• The law would take effect on the first day of the third month after it is signed, giving employers a short window to adjust payroll and scheduling practices before the new rules kick in.
• The Labor Secretary could set the threshold even higher than the bill requires through a formal rulemaking process. Automatic annual updates would not need to go through the usual rulemaking procedures, making future increases faster and harder to block.