Restoring Overtime Pay Act of 2026
- Bill Number
- S. 4551
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 2
- Policy Area
- Labor and Employment
- Status
- Introduced
- Latest Action
- 2026-05-18: Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
- Last Updated
- 2026-06-16T13:47:39Z
AI-Generated Summary
Purpose The Restoring Overtime Pay Act of 2026 amends the Fair Labor Standards Act of 1938 to raise the salary threshold required for certain executive, administrative, and professional employees to qualify for exemption from federal overtime pay requirements. It also adjusts the duties test for exemption and requires annual updates to the threshold based on earnings data.
Key Provisions
- Sets a minimum weekly salary (or equivalent fee) for exemption starting at an annualized rate of $45,000 upon enactment, increasing to $55,000 in 2027, $65,000 in 2028, and $75,000 in 2029.
- From 2030 onward, ties the threshold to the 55th percentile of weekly earnings of full-time salaried workers, with automatic annual updates by the Secretary of Labor using Bureau of Labor Statistics data.
- Allows the Secretary to set a higher threshold through notice-and-comment rulemaking using a specified data set and methodology.
- Requires the Bureau of Labor Statistics to publish quarterly earnings data by census region.
- Modifies the duties test in Section 13(a)(1) by removing certain retail or service establishment exceptions and changing the limit on non-exempt duties from less than 40 percent to not less than 20 percent of time spent on activities not directly related to exempt work.
- Takes effect on the first day of the third month after enactment.
Significant Changes to Existing Law
- Introduces a statutory, escalating salary floor for the white-collar exemption, replacing reliance solely on Department of Labor regulations.
- Adds automatic indexing to national earnings percentiles without requiring further rulemaking for updates.
- Tightens the duties test by lowering the allowable percentage of time on non-exempt tasks and eliminating prior carve-outs for certain establishments.
- Mandates public data publication to support threshold calculations.
Potential Impacts
- Increases the number of salaried employees entitled to overtime compensation, raising labor costs for employers who must either pay overtime or adjust salaries and classifications.
- Requires government agencies, particularly the Department of Labor and Bureau of Labor Statistics, to implement new thresholds, conduct updates, and publish data regularly.
- May affect worker compensation practices across industries, with possible shifts in hiring, job structuring, or total pay packages for citizens in salaried roles.
- Could influence international labor comparisons or trade discussions if U.S. overtime standards rise relative to other countries.
Main Stakeholders Affected
- Salaried employees currently classified as exempt from overtime.
- Employers in sectors relying on white-collar exemptions, such as professional services, management, and administration.
- The Department of Labor for enforcement and rulemaking.
- The Bureau of Labor Statistics for data collection and publication.
- Congress and labor policy advocates involved in wage and hour regulation.
Notable Legal, Constitutional, or Political Implications
- Strengthens congressional direction over FLSA exemptions, potentially limiting agency discretion in future interpretations.
- Raises questions about the scope of the duties test change and its consistency with long-standing regulatory frameworks.
- Creates an ongoing mechanism for threshold adjustments that bypasses standard administrative procedures for updates, which may affect legal challenges or compliance predictability.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (27)
Sen. Schumer, Charles E. [D-NY], Sen. Padilla, Alex [D-CA], Sen. Schatz, Brian [D-HI], Sen. Duckworth, Tammy [D-IL], Sen. Warren, Elizabeth [D-MA], Sen. Baldwin, Tammy [D-WI], Sen. Murray, Patty [D-WA], Sen. Markey, Edward J. [D-MA], Sen. Whitehouse, Sheldon [D-RI], Sen. Booker, Cory A. [D-NJ], Sen. Blumenthal, Richard [D-CT], Sen. Fetterman, John [D-PA], Sen. Cantwell, Maria [D-WA], Sen. Murphy, Christopher [D-CT], Sen. Gallego, Ruben [D-AZ], Sen. Wyden, Ron [D-OR], Sen. Merkley, Jeff [D-OR], Sen. Durbin, Richard J. [D-IL], Sen. Welch, Peter [D-VT], Sen. Hirono, Mazie K. [D-HI], Sen. Kim, Andy [D-NJ], Sen. Alsobrooks, Angela D. [D-MD], Sen. Reed, Jack [D-RI], Sen. Luján, Ben Ray [D-NM], Sen. Blunt Rochester, Lisa [D-DE], Sen. Hickenlooper, John W. [D-CO], Sen. Gillibrand, Kirsten E. [D-NY]
Recent Actions
- 2026-05-18: Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
- 2026-05-18: Introduced in Senate
Bill Versions
- Restoring Overtime Pay Act of 2026 — issued 2026-05-18 — PDF (7 pages)