You've probably heard the name "Project 2025" tossed around like a political football lately. Honestly, it’s a massive document—over 900 pages—and most people haven't actually read the thing. But if you work a 40-hour week and rely on those extra time-and-a-half hours to pay your mortgage or buy groceries, the section on Project 2025 overtime pay is basically the only part that matters to your bank account. It’s not just dry policy talk. It’s about how much money shows up in your direct deposit.
The Heritage Foundation, which spearheaded this "Mandate for Leadership," isn't just suggesting minor tweaks. They’re proposing a fundamental shift in how the Department of Labor (DOL) handles the Fair Labor Standards Act.
Right now, if you’re a non-exempt worker, you get paid extra for anything over 40 hours. Simple. But the proposal suggests moving toward something called "period averaging." Instead of calculating overtime on a weekly basis, it could be calculated over two or even four weeks. Think about that for a second. If you work 50 hours this week and 30 hours next week, your employer could potentially average that out to 40 hours per week and pay you zero overtime. You still worked 80 hours, but that 10-hour "sprint" in week one doesn't trigger a bonus anymore. It's a massive change.
The Reality of Working Overtime Under This Plan
The current legal framework for overtime hasn't changed much since the 1930s. It’s built on the idea that a week is the gold standard for work-life balance. Project 2025 argues that this is "stiff" and "outdated." They want more "flexibility."
Flexibility sounds great in a brochure. Who doesn't want a flexible schedule? However, in the context of Project 2025 overtime pay, flexibility often translates to "lower costs for the employer." The document specifically mentions that the Secretary of Labor should allow employers and employees to agree to a two- or four-week period for calculating overtime.
Critics, like the Economic Policy Institute (EPI), are worried. They point out that in most workplaces, the "agreement" between an employee and a boss isn't exactly a meeting of equals. If your boss says, "Hey, we're doing the four-week averaging now," most people aren't in a position to say no. This could lead to a situation where you’re working grueling 60-hour weeks during a peak season, but because things slow down later in the month, your paycheck stays flat. It’s a gamble on your labor that favors the company's bottom line over your predictable income.
Could You Lose Your Overtime Eligibility Entirely?
This is where things get even more technical, but hang with me. It’s important.
There’s a concept called the "salary threshold." This is the dollar amount where, if you earn less than this, you must be paid overtime, regardless of your job duties. The Biden administration recently pushed to raise this threshold significantly, aiming to cover millions more workers. Project 2025 takes a different tack. It suggests that the DOL should focus on the "standard" duties test and perhaps revert to a lower salary threshold or allow for more exemptions for "highly compensated employees."
Basically, they want to make it easier for companies to classify you as an "exempt" employee.
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If you're labeled as a manager or a professional—even if you’re mostly doing manual labor or routine tasks—you might find yourself exempt from overtime pay. The proposal argues that the current rules are too "one-size-fits-all" and don't account for the modern, remote, and digital workforce. But if the threshold doesn't keep up with inflation, or if the "duties test" becomes a loophole, a huge chunk of the middle class could see their overtime pay vanish. It’s a shift from protecting the worker to "freeing" the business from what the authors call "burdensome regulations."
The "Comp Time" Trade-Off
Another big piece of the Project 2025 overtime pay puzzle is the idea of "comp time" in the private sector. Currently, this is mostly a thing for government employees.
The idea is that instead of getting paid $30 an hour for overtime, you get 1.5 hours of paid time off later. The Heritage Foundation argues this helps parents and people who need a better work-life balance. "Don't take the money, take the afternoon off to see your kid's soccer game," is the pitch.
But there's a catch.
- You can't always choose when to use that time.
- The employer usually has the final say on scheduling.
- If the company goes bust, that "stored" time might just disappear.
- You can't pay rent with "comp time."
For a lot of hourly workers, overtime isn't a luxury; it's a survival mechanism. Swapping cash for the promise of a future day off is a hard sell when the electric bill is due on the 15th.
The Economic Philosophy Behind the Proposals
To understand why this is being proposed, you have to look at who wrote it. Project 2025 was curated by people who believe that the market knows best. They argue that the Department of Labor has become too much of a "worker's advocate" and not enough of a "neutral referee."
By deregulating Project 2025 overtime pay, they believe businesses will be more likely to hire. They argue that if it’s cheaper to give someone an extra five hours of work, a business will grow faster, eventually creating more jobs for everyone. It’s classic supply-side economics.
On the flip side, labor experts like those at the National Employment Law Project argue this is just a way to redistribute wealth upward. They see it as a direct attack on the 40-hour work week. If you make it cheaper for an employer to work an existing employee 50 hours than to hire a new one, they’ll just keep piling on the work. This leads to burnout and, ironically, less "flexibility" for the worker who is now stuck at the office for no extra pay.
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Real-World Impact: What Happens to Your Paycheck?
Let's look at a hypothetical—but very real—scenario. Imagine you’re an assistant manager at a retail store. You make $45,000 a year. Under current rules, if you work 50 hours during the holiday rush, you’re getting a nice bump in your check.
If the Project 2025 overtime pay changes were fully implemented:
- Your boss might switch you to a 4-week averaging period.
- You work 50, 50, 30, and 30 hours over a month.
- Total hours: 160. Average: 40 per week.
- Total overtime pay: $0.
Under the current system, you would have been paid for 20 hours of overtime. At a rate of roughly $21.60/hour, your overtime rate would be $32.40. That’s nearly $650 missing from your month’s gross pay. For a family living paycheck to paycheck, that is the difference between a car repair and taking the bus.
It’s also worth noting that Project 2025 suggests "clarifying" the difference between employees and independent contractors. We've seen this play out in the "gig economy" with companies like Uber and Lyft. If more workers are classified as contractors, they lose all overtime protections. Period. No threshold, no averaging, just a flat fee for the job done, no matter how many hours it takes.
What Most People Get Wrong About These Changes
There is a lot of fear-mongering on both sides of the aisle. Some say Project 2025 will "end the weekend." That's an exaggeration. Others say it won't affect anyone but high-level executives. Also not true.
The most nuanced reality is that these changes would likely happen through "rulemaking" rather than a single act of Congress. A new Secretary of Labor could simply issue new guidance on how the FLSA is enforced. It doesn't require a brand-new law to change the "salary threshold" or the "duties test." It just takes a signature in an office in D.C.
This means the changes could happen fast. It also means they could be tied up in court for years. We saw this when the Obama administration tried to raise the overtime threshold—a judge in Texas blocked it at the eleventh hour. Then the Trump administration set their own, lower threshold. Then the Biden administration raised it again. The Project 2025 overtime pay plan is essentially an attempt to stop this "regulatory ping-pong" by locking in a more business-friendly interpretation of the law.
Why This Still Matters for the Future of Work
The debate over overtime isn't just about money. It’s about time. It's about who owns your Saturday.
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If the cost of your time goes down, your employer is more likely to take more of it. If the cost of your time is high (1.5x), the employer is incentivized to let you go home and see your family. That’s the core tension. Project 2025 proponents argue that we should trust the individual to negotiate their own time. Opponents argue that in the real world, "negotiation" is a myth for most hourly workers.
We also have to consider the "highly compensated employee" (HCE) exemption. Project 2025 suggests that anyone making over a certain amount—perhaps as low as $100,000—should be automatically exempt from overtime, regardless of what they actually do. While $100k sounds like a lot, in cities like San Francisco, New York, or Seattle, that’s a middle-class salary. A lot of tech workers, nurses, and mid-level managers who currently get overtime could see that disappear overnight.
Actionable Steps: How to Prepare for Potential Changes
Whether or not these specific proposals become reality, the conversation around overtime is shifting. You shouldn't wait for a change in the White House to understand your rights.
Track your hours independently. Don't just rely on the company's punch clock. Keep a log. If "period averaging" ever becomes a thing, you'll need precise records to ensure you aren't being shortchanged beyond what the law allows.
Review your job description. The "duties test" is the primary way people lose overtime. If your job description says you're a "manager" but you spend 90% of your time stocking shelves or entering data, you might be misclassified even under current rules. Knowing exactly what you do—and how it aligns with DOL standards—is your best defense.
Understand your "total compensation." If a company offers you "comp time" instead of overtime, get the terms in writing. How long does the time stay in your "bank"? What happens to it if you quit? Can they deny your request to use it? If the law changes to allow this in the private sector, the "fine print" will be where you win or lose.
Stay vocal in your workplace. Policy changes often happen because no one objects. If your HR department starts talking about "modernizing" pay structures or "flexibility," ask specifically how it affects overtime calculations.
The Project 2025 overtime pay proposals represent a seismic shift in the American workplace. It’s a move toward a model where the "work week" is a fluid concept and the "overtime premium" is a hurdle for businesses to clear rather than a right for workers to claim. Understanding the mechanics of these proposals is the first step in deciding whether that's a future you’re okay with. It's not just politics; it's your time and your paycheck. Keep an eye on the Department of Labor's "Notice of Proposed Rulemaking" (NPRM) filings, as that's where the first signs of these changes will actually appear if the plan moves forward.