WASHINGTON – Late last week, U.S. Sens. Tim Scott (R-SC) and Lamar Alexander (R-TN), along with Reps. Tim Walberg (R-MI) and John Kline (R-MN), introduced S. 2707 and H.R. 4773, respectively. The legislation, the Protecting Workplace Advancement and Opportunity Act, would require the Department of Labor (DOL) to start over with its overtime proposal, which was published on July 6, 2015.
DOL’s proposed rule would extend overtime protections to nearly five million white collar workers within the first year of its implementation and raise the minimum salary threshold required to qualify for the FLSA’s “white collar exemption” from $23,660 to $50,440 per year. DOL also proposed to automatically update the salary threshold in between rulemakings to avoid it becoming outdated. While the proposal does not propose changes to the duties tests—the tests that establish whether an employee can qualify for the “white collar” exemption—DOL has indicated that it is contemplating changing them.
According to Scott, the Protecting Workplace Advancement and Opportunity Act stops DOL from “irresponsibly redefining the overtime threshold without understanding the real world consequences. It will also require [DOL] to start over and ensure that any new regulation on overtime considers the daily impact on our nation’s economy.” Specifically, the legislation would require DOL to conduct a comprehensive economic analysis on the impact of mandatory overtime expansion on small businesses, nonprofits and public employers before issuing any final rule. In addition, S. 2707 and H.R. 4773 would also prohibit automatic increases to the overtime threshold and require a formal rulemaking process prior to any changes in the duties tests.
Lawmakers introduced the legislation mere days after DOL sent its final overtime rule to the Office of Management and Budget (OMB), which is generally the last step in the process before a regulation is published and often lasts between 30 and 90 days. Many believed the final rule would be released in July 2016, but by sending the rule to OMB on March 14, it appears the final rule may be announced earlier than anticipated.
Last week NACS members were on Capitol Hill during the NACS Government Relations Conference talking with legislators about their businesses. Labor issues were a hot topic of the discussions, and retailers shared that in its overtime proposal, DOL rejected longstanding methodology that considered differences in regional labor markets and across various industries when setting the overtime salary threshold. Instead, DOL chose to set the salary threshold in its proposal based on nationwide data. Therefore, DOL’s overtime proposal would disproportionately increase labor costs of certain geographic regions.
NACS also filed comments on DOL’s overtime proposal in September 2015.
Visit the NACS Grassroots page to identify your representative and to find a pre-written, editable letter that you can immediately email to their office to help NACS slow down the new overtime rules.