[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 1041 Introduced in Senate (IS)]
<DOC>
118th CONGRESS
1st Session
S. 1041
To amend the Fair Labor Standards Act of 1938 to establish a minimum
salary threshold for bona fide executive, administrative, and
professional employees exempt from Federal overtime compensation
requirements, and automatically update such threshold each year, and
for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 29, 2023
Mr. Brown (for himself, Mr. Schumer, Mr. Sanders, Ms. Baldwin, Mr.
Blumenthal, Mr. Booker, Ms. Cantwell, Mr. Casey, Ms. Duckworth, Mr.
Durbin, Mr. Lujan, Mr. Markey, Mr. Merkley, Mr. Murphy, Mrs. Murray,
Mr. Padilla, Mr. Reed, Mr. Schatz, Ms. Warren, and Mr. Wyden)
introduced the following bill; which was read twice and referred to the
Committee on Health, Education, Labor, and Pensions
_______________________________________________________________________
A BILL
To amend the Fair Labor Standards Act of 1938 to establish a minimum
salary threshold for bona fide executive, administrative, and
professional employees exempt from Federal overtime compensation
requirements, and automatically update such threshold each year, and
for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Restoring Overtime Pay Act of
2023''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) The Fair Labor Standards Act of 1938 (29 U.S.C. 201 et
seq.) established overtime compensation requirements for
certain employees when they work more than 40 hours in a given
workweek.
(2) Under section 13(a)(1) of such Act, Congress delegated
to the Secretary of Labor the authority to define and delimit
the terms relating to the exemption for bona fide executive,
administrative, and professional employees (commonly known as
the ``white-collar exemption'').
(3) For more than 75 years, the Secretary of Labor has
exercised the Secretary's delegated authority to issue
regulations that define and delimit the terms relating to the
white-collar exemption by applying a duties test and applying a
minimum compensation level (or salary threshold).
(4) The Secretary of Labor began utilizing a salary
threshold in the initial regulations defining and delimiting
the terms relating to the white-collar exemption, which were
first issued in 1938.
(5) Congress has long approved the use of a salary
threshold by the Secretary of Labor, as demonstrated by the
fact that Congress has amended the Fair Labor Standards Act of
1938 at least 10 times since 1938 and has not precluded the
Secretary from using a salary threshold.
(6) The salary threshold became woefully out of date and
ineffective as a result of not being sufficiently updated to
keep pace with the changing economy, as evidenced by the fact
that 63 percent of all full-time salaried workers were
guaranteed overtime pay under section 7 of the Fair Labor
Standards Act of 1938 based on their salaries in 1975 while, in
2022, less than 15 percent of all full-time salaried workers
are guaranteed such overtime pay under the overtime rule
promulgated on September 27, 2019.
(7) Weak overtime protections also hurt the many workers
who are forced into part-time jobs but need full-time jobs to
support themselves and their families. When employers can no
longer overwork employees who are exempt from overtime pay
because of lax standards, they will be forced to spread work
and hours across their workforce. Restoring overtime
protections is especially important in 2023, as the economy of
the United States is still recovering from the pandemic and
many workers report their employers demanding excessive hours.
(8) In 2015, when the Department of Labor proposed an
increase to the overtime salary threshold rule under the Obama
Administration, it found that the historic range of the
overtime salary threshold under the Fair Labor Standards Act of
1938 ran from approximately the 35th to the 55th percentile of
weekly earnings for all full-time salaried workers. By phasing
the overtime salary threshold back up to the 55th percentile of
earnings of full-time salaried workers nationally--which after
adjusting for inflation is projected to translate to an
annualized amount of $73,551 in 2021 and $82,745 by 2026
(roughly the level of the boldest State overtime threshold
increase)--the United States can restore overtime protections
to historic levels.
SEC. 3. MINIMUM SALARY THRESHOLD FOR BONA FIDE EXECUTIVE,
ADMINISTRATIVE, AND PROFESSIONAL EMPLOYEES EXEMPT FROM
FEDERAL OVERTIME COMPENSATION REQUIREMENTS.
(a) In General.--Section 13 of the Fair Labor Standards Act of 1938
(29 U.S.C. 213) is amended--
(1) in subsection (a)(1)--
(A) by inserting ``subsection (k) and'' after
``subject to''; and
(B) by inserting ``(except as provided under
subsection (k)(2)(C))'' after ``Administrative
Procedure Act''; and
(2) by adding at the end the following:
``(k) Minimum Salary Threshold.--
``(1) In general.--Beginning on the effective date of the
Restoring Overtime Pay Act of 2023, 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).
``(2) Salary threshold.--
``(A) In general.--Subject to subparagraphs (B) and
(C), the applicable annualized salary threshold shall
be--
``(i) $45,000, beginning on the effective
date of the Restoring Overtime Pay Act of 2023;
``(ii) $55,000, beginning on January 1,
2024;
``(iii) $65,000, beginning on January 1,
2025;
``(iv) $75,000, beginning on January 1,
2026; and
``(v) beginning on January 1, 2027, 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 2026.
``(B) Increased threshold.--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--
``(i) is greater than the applicable
annualized salary threshold under subparagraph
(A); and
``(ii) is calculated based on a data set
and methodology established by the Secretary
that are capable of being updated in accordance
with subparagraph (C).
``(C) Automatic updates.--
``(i) In general.--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--
``(I) 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
``(II) in the case in which the
Secretary establishes an increased
salary threshold under subparagraph
(B), the greater of--
``(aa) the 55th percentile
described in subclause (I); and
``(bb) 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).
``(ii) Nonapplicability of rulemaking.--
Section 553 of title 5, United States Code,
shall not apply to any update described in this
subparagraph.
``(D) Notice requirement.--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.''.
(b) Publication of Earnings.--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).
SEC. 4. NONEXEMPT DUTIES LIMIT FOR BONA FIDE EXECUTIVE, ADMINISTRATIVE,
OR PROFESSIONAL EMPLOYEES.
Section 13(a)(1) of the Fair Labor Standards Act of 1938 (29 U.S.C.
213), as amended in section 3(a)(1), is further amended--
(1) by striking ``of a retail or service establishment
shall not'' and inserting ``shall'';
(2) by striking ``because of'' and all that follows through
``administrative activities,'';
(3) by striking ``less than 40'' and inserting ``not less
than 20''; and
(4) by striking ``such activities'' and inserting
``activities not directly or closely related to the performance
of executive or administrative activities''.
SEC. 5. EFFECTIVE DATE.
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.
<all>