Overtime pay threshold would rise to $75,000 by 2029 under HR 8868

What does this do?

HR 8868 raises the salary level below which employers must pay overtime to workers in executive, administrative, or professional roles, setting it at $45,000 upon enactment, then $55,000 in 2027, $65,000 in 2028, and $75,000 in 2029. From 2030 onward, the threshold adjusts automatically each year to match the 55th percentile of full-time salaried workers' earnings nationally. The bill also tightens the job-duties test, requiring that at least 20 percent of an exempt employee's work time be spent on non-exempt tasks before an employer can use job duties as a basis to deny overtime.

Who does it affect?

Salaried workers currently classified as overtime-exempt but earning below the new thresholds are directly affected, as are workers in management-titled roles who spend significant time on non-managerial tasks. Employers who rely on the current exemption rules would need to either raise affected workers' salaries or begin paying overtime for hours worked beyond 40 per week.

Why does it matter?

Employers face the choice of increasing salaries or paying overtime to a broader set of workers, raising labor costs for those currently relying on the exemption. The automatic annual adjustment starting in 2030 removes the need for future legislation to keep the threshold aligned with national wage levels.

Where does it stand?