Restoring Overtime Pay Act of 2026

This bill proposes significant changes to the Fair Labor Standards Act of 1938, primarily by establishing a new minimum salary threshold for executive, administrative, and professional employees to qualify for exemption from federal overtime pay requirements. The legislation outlines a phased increase for this threshold, beginning at $45,000 upon the bill's effective date and incrementally rising to $75,000 by January 1, 2029. This measure aims to expand overtime eligibility to a greater number of salaried workers.

A key provision of the bill mandates that, starting January 1, 2030, the salary threshold will be automatically updated annually. This update will be based on the 55th percentile of weekly earnings for full-time salaried workers nationally, as determined by the Bureau of Labor Statistics. Additionally, the bill modifies the "duties test" for these exemptions, stipulating that employees performing non-exempt activities for more than 20% of their time may no longer qualify for the exemption, thereby clarifying and potentially narrowing the scope of who can be considered exempt.