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Salaried managers earning under $75k could qualify for overtime
Representative Mark Takano’s proposal raises the federal pay threshold that allows companies to treat executive, administrative, and professional staff as overtime‑exempt.
Many salaried employees labeled as managers or professionals are exempt from federal overtime pay rules, meaning they can work long hours without time‑and‑a‑half pay. A proposal in the U.S. House of Representatives would tighten that exemption by tying it to a much higher salary floor.
The bill, introduced by Representative Mark Takano of California with more than twenty Democratic cosponsors, would amend the Fair Labor Standards Act of 1938. To remain exempt from overtime requirements, executive, administrative, and professional employees would have to earn above a new nationwide salary threshold that climbs over several years and later adjusts automatically.
A rising pay line for overtime eligibility
Under the proposal, employers could treat those workers as overtime‑exempt only if their salaries exceed specific benchmarks. The threshold would start at $45,000 once the law takes effect and then increase in scheduled steps.
The planned increases would raise the line to $55,000 beginning Jan. 1, 2027, $65,000 beginning Jan. 1, 2028, and $75,000 beginning Jan. 1, 2029. Starting Jan. 1, 2030, the threshold would shift to a formula tied to national wage data, pegged to the 55th percentile of weekly earnings for full‑time salaried workers, based on Bureau of Labor Statistics figures.
After that point, the Labor Department would update the threshold every year so it keeps pace with wage data rather than remaining fixed for long periods.
Limiting how much non‑manager work counts
The bill also adjusts how much non‑managerial work an employee can perform while still being treated as an exempt executive or administrative worker. It would limit duties unrelated to management or administrative responsibilities to no more than 20 percent of the employee’s work.
Supporters frame that change as a guardrail against job titles being used to classify workers as managers even when most of their day is spent on routine tasks that would normally qualify for overtime pay.