On March 29th, 2023, Ohio’s U.S. Senator Sherrod Brown introduced the Restoring Overtime Pay Act of 2023. If passed, the bill would increase the salary threshold for exempt workers over the next four years and possibly longer. It would make millions of American workers eligible for overtime pay when they work more than 40 hours a week. Overtime-exempt employees refer to individuals who, due to their job duties, are not legally entitled to overtime and are, therefore, “exempt” from the laws regarding overtime pay.
Understanding The Bill
If the bill is passed, the salary level for overtime-exempt employees will jump to $45,000 per year, equating to approximately $865 per week. Currently, the requirement is $684 per week or $36,000 per year. In addition, the salary level would then increase by $10,000 in January of 2024, again in 2025, and in 2026, reaching $75,000 per year. Since only 15% of full-time salaried workers are guaranteed overtime pay, this act would strengthen overtime protections and guarantee that 55% of all workers will be eligible for overtime pay. Starting on January 1st, 2027, the salary level would increase again to an annualized amount equal to the rate of the 55th percentile of weekly earnings of full-time salaried workers nationally.
What You Need To Know
Expanding overtime pay would mean more money in the pockets of working-class and middle-class Ohioans who work 50+ hours a week. Should this act pass, business owners must be prepared to adjust their practices and ensure compliance with the new regulations. Consider the following implications your business could face:
- You must ensure that employees are properly classified, and paid overtime wages for hours worked over 40 in a workweek
- You will need to track the hours worked by a larger number of employees, increasing administrative costs and may require additional resources to manage
- Compensation structures of employees who become eligible for overtime pay may need to be adjusted to ensure compliance
- Increased potential for lawsuits should you fail to classify employees or pay overtime wages properly
It’s essential to stay informed about the status of this act and any changes to the law that may impact your business. Consider partnering with GMS, a professional employer organization (PEO) that will keep you updated on ever-changing rules and regulations. We provide time and attendance tracking software to help businesses efficiently and accurately track employee hours worked. In addition, we will help you manage payroll for your employees who become eligible for overtime pay, ensuring that your employees are paid accurately. Let’s take this on together so you no longer have to handle these tasks alone. Contact us today to learn more.