Legislation Introduced to Block Proposed Department of Labor Overtime Rule

Author: Marta Moakley, XpertHR Legal Editor

March 18, 2016

The Protecting Workplace Advancement and Opportunity Act was introduced yesterday in the House and Senate. The legislation, sponsored by Senator Lamar Alexander and Representative John Kline, aims to restrict proposed rules defining and delimiting the Fair Labor Standards Act's (FLSA's) overtime exemptions for executive, administrative, professional, outside sales and computer employees, and calls for the Secretary of Labor to conduct a full and complete economic analysis with improved economic data on the ramifications of the overtime rule.

Earlier this week, the Department of Labor sent its FLSA regulations to the Office of Management and Budget (OMB) for a final review, which is one of the final steps in the regulatory process. The draft regulations issued last year would raise the minimum salary for an employee exempt from overtime requirements from $23,660 to $50,440. However, the final rule may further expand that threshold, or perhaps include a "bright-line duties test" (requiring that, if an employee is to be considered exempt, he or she must perform exempt duties for a defined proportion of time).

The legislation states that "the Secretary [of Labor] significantly underestimated the cost of compliance" of the proposed regulations. In addition to the requirement that a similar rule be proposed only after a rigorous economic analysis has been conducted, the legislation would exclude any automatic updates to the minimum threshold based on inflation.

Senator Alexander, who is the Chairman of the Senate Health, Education, Labor and Pensions Committee, stated in a press release that "This mandate on employers will hurt the lowest paid American workers the most, by reducing their opportunities for a promotion or a better job and making it all but impossible for workers to negotiate flexible schedules."