You’ve probably seen the headlines or heard the chatter at the breakroom. There’s a lot of noise out there about how people get paid, and honestly, it’s getting hard to tell fact from political friction. We are talking about the Project 2025 overtime rules—a set of proposals that could fundamentally rewrite how "time and a half" works in America.
It isn’t just some dry policy paper. If you’re an hourly worker or a middle-manager with a salary, these ideas land right on your bank account. Basically, the plan aims to give employers more "flexibility," but for many workers, that’s a scary word that usually means "less money."
The 80-Hour Calculation: Goodbye, Weekly Overtime?
Right now, the law is simple. If you work more than 40 hours in a seven-day week, you get paid extra. It’s been that way since the Fair Labor Standards Act (FLSA) of 1938.
But Project 2025 suggests something called "compressed workweeks" or multi-week periods. Instead of looking at one week, your employer could look at two weeks or even a full month.
Imagine this. You work 50 hours this week because a big project is due. You’re exhausted, but you’re thinking about that sweet 10 hours of overtime pay. Under the proposed Project 2025 overtime rules, if your boss gives you only 30 hours next week, your "average" over those two weeks is 40 hours.
The result? Zero overtime pay.
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Critics, like the Economic Policy Institute, argue this could strip protections from roughly 8 million workers. It turns your schedule into a giant puzzle where the employer always keeps the extra pieces. You’re still working the long hours, but the "time and a half" incentive disappears because it’s balanced out by a slow week later.
The Salary Threshold: Who Counts as "Exempt"?
There is a weird gray area in labor law where if you make a certain salary, your boss doesn't have to pay you overtime at all. You’re "exempt."
Under recent rules, that salary threshold was set to climb significantly, eventually reaching over $58,000. Project 2025 wants to hit the brakes on that. The proposal suggests returning to the Trump-era threshold, which was significantly lower, around $35,568.
Why does this matter?
- Lower threshold = Fewer protected people. If you earn $45,000 and the threshold is $35k, you are "exempt." You can work 60 hours a week for the same flat salary.
- The "Manager" Trap. This has always been an issue at places like dollar stores or fast-food joints. They give a worker a "manager" title and a small salary boost just to avoid paying them hourly overtime.
- Regional Differences. Project 2025 specifically mentions that the Department of Labor should set thresholds that don't "punish" businesses in low-cost regions like the South. This could mean your overtime rights depend entirely on your zip code.
Swapping Cash for "Comp Time"
Another big pillar of the Project 2025 overtime rules is the Working Families Flexibility Act. It sounds nice, right? Flexibility for families.
The idea is that instead of getting paid time-and-a-half in your paycheck, you could choose to receive "comp time"—basically, extra paid time off to use later.
Here is the catch: the employer usually gets the final say on when you use that time. Honestly, if you’re a parent trying to catch a soccer game, that "flexibility" doesn't help if your boss says "no" to your time-off request because the warehouse is busy. Labor advocates worry this is just a way for companies to keep their cash and offer a benefit that many employees will never actually get to use.
No Tax on Overtime? The 2025 Reality
Interestingly, while Project 2025 lays the groundwork for these structural changes, the political landscape shifted in mid-2025 with the passage of the "One Big Beautiful Bill" (OBBB). This law introduced a federal income tax deduction for the "half" portion of overtime pay.
So, if you make $20 an hour and $30 for overtime, that extra $10 is now deductible from your federal taxes for the 2025 through 2028 tax years.
It’s a bit of a contradiction. On one hand, the Project 2025 overtime rules seek to make it easier for employers to avoid paying overtime. On the other hand, new tax laws make the overtime you do get slightly more valuable. It’s like being given a bigger spoon for a bowl of soup that’s slowly being drained.
What This Means for You Right Now
If these proposals are fully enacted, the workplace will look very different. You’ll need to be much more vigilant about tracking your hours over 14-day or 30-day periods.
Small businesses and nonprofits are actually some of the biggest supporters of these changes. Groups like the Association of Washington Business have testified that rising salary thresholds are forcing them to cut staff. They argue that the Project 2025 overtime rules are a necessary survival tool for local shops that can't afford the same labor costs as giant corporations.
Actionable Steps for Workers:
- Audit Your Pay Stubs: Starting in early 2026, you can claim the new overtime tax deduction. Make sure your employer is separately tracking your "qualified overtime compensation" (the 0.5x premium).
- Know Your Classification: Check if you are currently "non-exempt." If the salary threshold drops back to 2019 levels, your status could change from "overtime-eligible" to "exempt" overnight.
- Track Your Own Hours: Don't rely solely on the company's portal. If multi-week averaging becomes the norm, you’ll need a personal log to ensure you aren't being "averaged" out of pay you rightfully earned.
- Review Your Contract: If you are in a union, Project 2025 suggests that overtime rules should be negotiable. This means your "40-hour week" could become a bargaining chip during your next contract renewal.
The debate over the Project 2025 overtime rules isn't going away. It’s a tug-of-war between the "flexibility" businesses say they need and the "protection" workers have relied on for nearly a century. Whether you see it as a modernization of the workplace or a rollback of hard-won rights, one thing is certain: your paycheck is at the center of the storm.