Federal legislation introduced recently would raise the salary threshold for overtime exemptions to $45,000 annually and increase the minimum each year until it reaches $75,000 in 2026.
Ohio Democratic Congressman Sherrod Brown introduced the bill, the Restoring Overtime Pay Act, which would legislate a minimum threshold for bona fide executive, administrative and professional employees exempt from federal overtime requirements.
Currently, under Fair Labor Standards Act regulations, exempt employees must earn at least $684 per week on a salary basis ($35,568 per year) and be classified as bona fide executive administrative or professional employees.
The bill would increase the minimum threshold to a salary of $45,000 annually at the bill’s passage, followed by increases to $55,000 in 2024, $65,000 in 2025 and $75,000 in 2026. In 2027, the amount would shift to the 55th percentile of weekly earnings of full-time salaried employees nationally, as determined by the U.S. Bureau of Labor Statistics.
The result would be a stepped expansion of the percentage of U.S. adults qualifying for overtime pay — time-and-one-half pay for all hours worked each week past 40. The legislation would eventually ensure 55% of salaried employees are eligible for overtime, according to Brown’s office.
“If you put in extra work, you should earn extra pay — it’s that simple,” he said in a press release announcing the legislation. “Expanding overtime pay would mean more money in the pockets of working class and middle-class Ohioans who work 50, 60, or 70 hours a week. It’s long past time for overtime work to mean overtime pay again.”
The Restoring Overtime Pay Act builds on an Obama-era rule in which the U.S. Department of Labor raised the overtime salary threshold to $47,476 annually. States and business groups challenged the rule in court, and DOL eventually abandoned its defense of it after a federal district court enjoined the rule.
More recently, the DOL has promised and repeatedly delayed the release of a rule that would set a new salary threshold for overtime eligibility. According to the agency’s most recent update, the rule is now expected in May.
Versions of the Restoring Overtime Pay Act have been introduced previously in the House and Senate, including in 2019.
The bill is co-sponsored by Sens. Chuck Schumer, D-N.Y. — Democratic Majority Leader — and Bernie Sanders, I-Vt., in addition to 17 other senators. Reps. Mark Takano, D-Calif., and Alma Adams, D-N.C., introduced companion legislation in the House.
