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S 4551

Restoring Overtime Pay Act of 2026

119th Congress Introduced by Angela Alsobrooks and 23 co-sponsors

Establishes a nationwide, automatically updating minimum salary threshold for overtime-exempt employees, expanding overtime protections as thresholds rise over time.

Introduced in Senate
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WeVote Research Nonpartisan
Bill Summary · S 4551

Overview

Restoring Overtime Pay Act of 2026 (S. 4551, 118th Congress, 119th Session) introduces a nationwide, automatic, annual-updating minimum salary threshold for employees exempt from federal overtime under the Fair Labor Standards Act (FLSA). The bill aims to restore and strengthen overtime protections for many workers by tightening the salary basis requirement for exemptions and adjusting the threshold over time based on earnings data.

Main purpose and intent

  • To establish a clear minimum annualized salary threshold for bona fide executive, administrative, and professional employees to qualify for the FLSA exemption from overtime pay.
  • To automatically update the threshold each year (and, if applicable, after an initial year) using data and methodology set by the Secretary of Labor, ensuring the threshold keeps pace with wage growth and economic conditions.
  • To modify the nonexempt duties test to limit exemptions to roles that are closely related to executive or administrative activities, reducing broad misclassification.

Key provisions and changes

  1. Section 13 FLSA amendments establishing a new subsection (k) – Minimum Salary Threshold

    • Exemption eligibility would require the employee to be paid on a salary or equivalent basis at or above a defined annualized threshold.
    • The initial and subsequent thresholds are:
      • $45,000/year starting on the act’s effective date
      • $55,000/year starting January 1, 2027
      • $65,000/year starting January 1, 2028
      • $75,000/year starting January 1, 2029
      • From January 1, 2030, the threshold becomes an annualized amount equal to the 55th percentile of weekly earnings of full-time salaried workers nationwide (as determined by BLS, based on Q2 data of the preceding year)
    • The Secretary may set a higher threshold via rulemaking, based on a data set and methodology the Secretary adopts, and such higher threshold must still be eligible for automatic periodic updates.
    • Automatic updates to the threshold occur annually (or as updated by the Secretary) and are not subject to formal notice-and-comment requirements under 5 U.S.C. § 553 for those updates.
    • The Secretary must publish notices in the Federal Register and on the Department of Labor’s website at least 60 days before any revised threshold takes effect.

  2. Section 2(a)(2) – Publication and transparency

    • The Secretary is required to publish, and the Bureau of Labor Statistics (BLS) must publish quarterly data on weekly earnings of full-time salaried workers by Census region on its public website.

  3. Section 3 – Nonexempt duties limit for bona fide executive, administrative, or professional employees

    • Removes broad or vague exemptions related to duties for retail or service establishments.
    • Tightens requirements so exemptions are limited to activities not directly or closely related to non-exempt executive or administrative activities.
    • Adjusts the “duties test” to require that duties be not less than 20% of non-qualifying activities (instead of the prior standard of at least 40%), and clarifies the scope regarding activities not directly or closely related to executive or administrative functions.

  4. Section 4 – Effective date

    • The act and its amendments take effect on the first day of the third month after enactment.

Who would be affected

  • Employers across the United States employing workers currently classified as exempt under the executive, administrative, or professional exemptions.
  • Employees who previously met the exemption threshold but would fall below the new, higher salary thresholds would become eligible for overtime pay (i.e., would move from exempt to nonexempt status, pending pay structure).
  • Employers would have to adjust payroll practices, salary levels, and possibly job duties to maintain exemption status or begin paying overtime to affected workers.
  • The public would gain greater access to wage data through BLS quarterly earnings publications for transparent wage dynamics.

Procedural and timeline aspects

  • Introduced in the Senate on May 18, 2026; referred to the Committee on Health, Education, Labor, and Pensions.
  • Effective date: the act and amendments take effect on the first day of the third month after enactment.
  • Automatic threshold updates occur annually, with an initial 2030 transition to tie the threshold to the 55th percentile of weekly earnings, alongside potential Secretary-initiated higher thresholds via rulemaking.
  • Notices for revised thresholds must be published at least 60 days before taking effect.

Potential impact considerations

  • Could significantly increase the number of workers eligible for overtime protection, reducing wage-and-hour misclassification.
  • Likely impact on employers’ payroll budgeting, compensation structures, and potential changes to staffing models.
  • Economic effects may vary by region and industry, given regional earnings data and sector-specific wage dynamics.
  • The automatic updating mechanism provides a predictable, data-driven path for overtime protections but may lead to periodic payroll cost increases for businesses.

Compiled from official sources — confirm details with the bill’s official record.

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