Alexander: Obama Labor Rule Will Increase Tuition on One Tenn. Campus $1,000 Per Student

Overtime rule will cost each independent four-year college in TN at least $1.3 million annually

Posted on March 17, 2016

WASHINGTON, March 17 — U.S. Sen. Lamar Alexander (R-Tenn.) today asked U.S. Secretary of Labor Tom Perez why the labor department is moving forward with its proposed “Overtime” rule “which colleges say could raise tuition by $1000 per student.”

At this morning’s hearing on the FY17 budget request for the labor department, Senator Alexander said to Secretary Perez, “If the president is going to go around, and I’m going to go around, and all of us are going to go around saying ‘we want to keep college costs down,’ how can you justify an overtime rule that might raise the cost of college by one thousand dollars per student?”

Last month the Tennessee Independent Colleges and Universities Association (TICUA) issued a letter saying, “In Tennessee, it is expected that the change will cost each four-year campus a minimum of $1.3 million. For instance, one TICUA member calculated that the first year impact would translate to a $1,000 per student increase in tuition. Another rural TICUA campus noted that the change would impact 133 employees for a total of $3.2 million.”

Last month in Nashville, Senator Alexander met with Claude Presnell – President, Tennessee Independent Colleges and Universities Association – where he outlined some specific ideas for actually keeping college affordable, highlighting the bipartisan FAST Act which he says would, “Reduce the length of the dreaded FAFSA form – which is the number one obstacle to applying for the Tennessee Promise's free tuition – from 108 questions to 2 questions, so more students can take advantage of our generous federal student aid programs.”

You can watch the full exchange at this morning’s Senate Appropriations Subcommittee on Labor, Health and Human Services, Education and Related Agencies hearing HERE.

Earlier today, Chairman Alexander and Senator Tim Scott (R-S.C.) released the Protecting Workplace Advancement and Opportunity Act – legislation that will ensure the Department of Labor pursues a balanced and responsible approach to updating federal overtime rules. Chairman Alexander said: “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. In just one example of the dramatic effect it will have, some of Tennessee’s small independent colleges are expecting it to cost them a minimum of $1.3 million each—a giant figure that may cost the colleges’ students in tuition hikes and cost employees in job cuts.”

Overview of the Protecting Workplace Advancement and Opportunity Act:

In 2014, the Obama administration began an effort to update the rules surrounding federal wage and hour standards. As part of that effort, the Department of Labor released a proposal that would more than double the salary threshold under which employees qualify for overtime pay. Concerns have been raised that the department’s proposed rule will result in workers having less flexibility and opportunity for advancement in the workplace. The proposal will also raise costs on small businesses, while doing nothing to streamline a complex and outdated maze of overtime rules.

With the department expected to release a final rule in the coming months, the Protecting Workplace Advancement and Opportunity Act will:

  • Prevent the department from finalizing a proposal that will limit opportunities for employees and place significant burdens on job creators;
  • Require the department to fully and accurately consider the economic impact of any rule on small businesses, nonprofits, institutions of higher education, and others who will be affected;
  • Ensure future changes to the salary threshold accurately reflect the economic realities facing workers and employers by making clear automatic increases are not allowed under current law; and
  • Promote transparency and accountability by requiring any changes to the duties tests be made available for public review and comment.

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For access to this release and the senator’s other statements, click here.

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