Millions of salaried workers could see bigger paychecks under a new bill that aims to dramatically expand overtime eligibility for Americans earning middle-class wages.
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Independent Senator Bernie Sanders and Democratic Representative Mark Takano have introduced the Restoring Overtime Pay Act of 2026, a bill that would raise the salary threshold for overtime pay and extend protections to tens of millions of workers currently excluded.
The proposal highlights a broader debate about how to address wage stagnation and rising costs. For millions of workers, the proposed law could determine whether working longer hours results in meaningfully higher pay.
What To Know
The new bill would gradually increase the salary level required to qualify for overtime from $35,568 today to more than $89,000 by 2030, potentially boosting wages for up to 29.3 million workers.
The bill comes after the Trump administration rolled back a Biden-era rule that would have expanded overtime protections to more than 4 million workers, according to the lawmakers’ materials.
“At a time of massive income and wealth inequality, when over 60 percent of Americans are living paycheck to paycheck, it is beyond unacceptable that President Trump is denying overtime pay to millions of workers who desperately need it to keep up with the outrageously high cost of living,” Sanders said in a statement.
“We should be making it easier, not harder, for Americans who work more than 40 hours a week to get the time-and-a-half pay that they have earned and deserve. That’s precisely what this bill would do.”
What the Bill Would Do
The key changes to the bill include the following:
- Raise overtime eligibility threshold from $35,568 to $89,000+ by 2030
- Expand protections to up to 29.3 million workers
- Increase the share of salaried workers eligible for overtime from 8 percent today to 55 percent
Michael Ryan, a finance expert and the founder of MichaelRyanMoney.com, said the bill arrives at a “particularly pointed moment” as the Trump administration reversed the Biden overtime rule this month, effectively resetting the overtime threshold back to $684 per week.
Ryan said this is “effectively un-protecting millions of workers who had gained overtime eligibility as recently as January 2025.”
“The Sanders bill would go dramatically further in the other direction, raising the threshold to approximately $98,000 by 2029 and automatically indexing it to the 55th percentile of full-time salaried wages going forward,” Ryan told Newsweek. “That’s not a modest adjustment, it’s a fundamental restructuring of who is considered a ‘manager’ exempt from overtime in America.”
Overtime Eligibility Expansion
How Workers Would See a Pay Boost
Currently, workers who qualify for overtime must be paid time-and-a-half for hours worked over 40 per week. But this depends on the worker’s paid salary.
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Under current law, a worker earning $50,000 per year is ineligible for overtime. However, if the bill were passed, this same worker would be eligible for overtime and could earn hundreds or thousands more annually, depending on hours worked.
“Americans are working more for less,” Takano said in a statement. “Expanding the overtime threshold for salaried employees is the best way to ensure that families can survive the cost-of-living crisis caused by Donald Trump. I am proud to introduce this bill to help make sure over 29 million workers get paid fairly.”
‘No Tax on Overtime’ Explained
The bill also comes amid debate over Republican-backed proposals like “No Tax on Overtime.”
Republicans’ calls for no taxes on overtime would eliminate the federal income tax on overtime earnings. Workers would still receive overtime pay, but the extra earnings would be tax-free. However, Democrats have argued the policy is misleading without broader eligibility since many workers don’t qualify for overtime at all and would not benefit from tax exemptions.
“By increasing the threshold, more workers would either qualify for overtime compensation, or employers would need to raise salaries high enough to justify exempt status,” Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek.
However, the current state of Congress means the bill will likely not progress, Thompson said.
“I don’t believe it has much of a chance in the current political environment with Republicans controlling both the House and Senate. The current regime is very pro-business, and this is dead on arrival,” Thompson said.
Who Would Benefit the Most
The bill would primarily impact:
- Middle-income salaried workers
- Frontline supervisors and lower-level managers
- Workers earning in the $35K–$90K range
- Employees in industries like:
- Retail
- Hospitality
- Healthcare
- Office/administrative roles
What Happens Next
The bill has been introduced in Congress but would need to pass the House and the Senate to be signed into law. Given political divisions, its path forward remains uncertain.
“In a Republican-controlled Congress hostile to minimum wage and overtime expansion, this bill will not pass,” Ryan said. “But it’s an important stake in the ground on a labor issue that is genuinely bipartisan at the voter level.”
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