Restoring Overtime Pay Act of 2026

This Act may be cited as the Restoring Overtime Pay Act of 2026.
Section 13 of the Fair Labor Standards Act of 1938 (29 U.S.C. 213) is amended—
in subsection (a)(1)—
by inserting subsection (k) and after subject to; and
by inserting (except as provided under subsection (k)(2)(C)) after Administrative Procedure Act; and
by adding at the end the following:
Beginning on the effective date of the Restoring Overtime Pay Act of 2026, the Secretary shall require that an employee described in subsection (a)(1), as a requirement for exemption under such subsection, be compensated on a salary basis, or equivalent fee basis, within the meaning of such terms in subpart G of part 541 of title 29, Code of Federal Regulations (or any successor regulation), at a rate per week that is not less than the weekly rate of the applicable annualized salary threshold under paragraph (2).
Subject to subparagraphs (B) and (C), the applicable annualized salary threshold shall be—
$45,000, beginning on the effective date of the Restoring Overtime Pay Act of 2026;
$55,000, beginning on January 1, 2027;
$65,000, beginning on January 1, 2028;
$75,000, beginning on January 1, 2029; and
beginning on January 1, 2030, an annualized amount that is equal to the rate of the 55th percentile of weekly earnings of full-time salaried workers nationally, as determined by the Bureau of Labor Statistics based on data from the second quarter of 2029.
The Secretary may establish, through notice and comment rulemaking under section 553 of title 5, United States Code, a salary threshold that is a rate that—
is greater than the applicable annualized salary threshold under subparagraph (A); and
is calculated based on a data set and methodology established by the Secretary that are capable of being updated in accordance with subparagraph (C).
Not later than 1 year after the salary threshold first takes effect under subparagraph (A)(v), and annually thereafter, or, in the case in which the Secretary establishes an increased salary threshold under subparagraph (B), annually after establishing such increased salary threshold, the Secretary shall update the rate of the salary threshold in effect under subparagraph (A)(v) or (B), as applicable, so that such rate is equal to—
in the case in which the Secretary does not establish an increased salary threshold under subparagraph (B), the 55th percentile of weekly earnings of full-time salaried workers nationally, as determined by the Bureau of Labor Statistics based on data from the second quarter of the calendar year preceding the calendar year in which such updated amount is to take effect; and
in the case in which the Secretary establishes an increased salary threshold under subparagraph (B), the greater of—
the 55th percentile described in subclause (I); and
the increased salary threshold established under subparagraph (B), as updated in accordance with the data set and methodology established by the Secretary under subparagraph (B)(ii).
Section 553 of title 5, United States Code, shall not apply to any update described in this subparagraph.
Not later than 60 days before a revised salary threshold under this paragraph takes effect, the Secretary shall publish a notice announcing the amount in the Federal Register and on the internet website of the Department of Labor.
Not later than 21 days after the end of each calendar quarter, the Bureau of Labor Statistics shall publish on its public website, for each week of such quarter, data on the weekly earnings of full-time salaried workers by census region (as designated by the Bureau of the Census).
Section 13(a)(1) of the Fair Labor Standards Act of 1938 (29 U.S.C. 213(a)(1)), as amended in section 2(a)(1), is further amended—
by striking of a retail or service establishment shall not and inserting shall;
by striking because of and all that follows through administrative activities,;
by striking less than 40 and inserting not less than 20; and
by striking such activities and inserting activities not directly or closely related to the performance of executive or administrative activities.
This Act, and the amendments made by this Act, shall take effect on the first day of the third month that begins after the date of enactment of this Act.