Speeches & Floor Statements

Floor Speech: Overtime Reform and Review Act

Posted on September 29, 2016

Senate offices have been hearing about something called the overtime rule on a daily basis. We are hearing about it from colleges, universities, Boy Scout troops, church camps, other non-profits, employers, and employees who don't like to be suddenly considered employees who punch a time card.

           Today, I would like to talk about action that Congress can take to change the effect of the overtime rule the administration issued that will go into effect in December unless we do something.

           The Senator from Oklahoma, Mr. Lankford, and the Senator from Maine, Ms. Collins, introduced legislation that would delay for six months the implementation of the rule. I cosponsored that legislation, and I fully support it.

           Yesterday, the House of Representatives passed a bill with that same language which would delay for six months the implementation of the rule. That would be my preferred solution.

           Today, I am introducing another piece of legislation that addresses the problems with the overtime rule that I hope will gather more bipartisan support. A similar bill was introduced in the House by Democrat Representative Kurt Schrader of Oregon and is cosponsored by 10 Democrats and seven Republicans. My hope is that when we come back in November, senators on both sides of the aisle will have heard from their Boy Scout troops, from their colleges and universities, from their restaurants, and from their employees, who say: “Wait a minute, this overtime rule makes no sense the way it is being implemented. Do something in November to change its negative effect on our country.”

           I am introducing a bill today with the cosponsorship of Senator Collins of Maine, Senator Lankford of Oklahoma, Senator Scott of South Carolina, and Senator Flake of Arizona that will protect America's non-profits, churches, colleges, and communities from the effect of the administration's overtime rule that will go into effect on December 1 unless we act.

           When we talk about employers that will be affected by overtime, we are talking about Operation Smile, which is a charity that funds cleft palate operations for children. Operation Smile says this rule may cost them at least 3,000 surgeries a year. The effect of this rule may mean 3,000 children won't have surgeries each year for cleft palates because of the cost of this regulation.

           We are talking about the Great Smoky Mountain Council of Boy Scouts. That is my home Boy Scout council where I grew up and where I live. They are telling me the new rule will result in about $100,000 in annual costs because, during certain seasons, employees staff weekend camping trips, which mean longer hours. That is what you do in Boy Scouts—you go on camping trips. And they are not eight-hour trips most of the time. If you are going to start saying they have to pay overtime to Scout masters and others, you are going to have fewer boys and girls having a chance for scouting.

            Senator Isakson of Georgia spoke on the floor about a phone call he received from the pastor at Johnson Ferry Baptist Church in Marietta, one of the largest Baptist churches in Georgia. That church provides daycare, early childhood development, and sports activities at Vacation Bible School, a 24/7 program for underprivileged kids in the Atlanta area. Under the overtime rule that goes into effect in December, a camp counselor for their Vacation Bible School will have to be paid overtime for many hours of the day when they are with the children, even if they are sleeping. So this rule could price the Johnson Ferry Baptist Church out of the business of providing Bible school church camp for underprivileged children.

   So there will be fewer cleft palate operations, fewer scouting opportunities, and fewer church camp opportunities for underprivileged children.

   Here's what I mean by the overtime rule:

           Hourly workers in this country are usually paid overtime, but salaried workers generally don't earn overtime unless they are making below a threshold set by the Labor Department and required by the Fair Labor Standards Act. Today that threshold is a little over $23,000. This new rule issued by the Obama Administration just four months ago raises the threshold from just over $23,000 to over $47,000 all at once on December 1. In other words, in three months it will double. This is a 100 percent increase, and on December 1, employers will have had only about six months to prepare for this, reclassify employees, put time clock systems in place, adjust workers’ schedules, and find new revenue to pay for all of this. It has thrown small businesses and colleges into a panic in the state of Tennessee.

One poll released this month found that 49 percent of business owners were not aware of the rule that goes into effect in three months.

           The legislation I am introducing today would stretch out over five years the administration's increase in the salary threshold for overtime pay. I have not met many people who don't believe the threshold ought to go up. I have not met many people who think that it ought to be doubled in six months and automatically increased every three years, or that it should jump so high and all at once.

   On December 1, under the legislation I am introducing, it would still increase significantly—from $23,660 to $35,984. This is about a 50 percent increase. This bill would modify a rule that many believe goes too high and too fast and will result in employers, non-profits, colleges, and others cutting workers’ hours and limiting their workplace benefits and flexibility, as well as costing students more in tuition.

           If there is one subject I hear about on the Senate floor, it is senators from both sides of the aisle saying college costs are too high. Yet the independent colleges and the public colleges of Tennessee have written me and they have detailed how the cost of this rule will have the effect of raising tuition by hundreds of dollars per student. So how can you go around complaining about college tuition increases on the one hand and on the other hand issue a rule that raises college tuition by hundreds of dollars in thousands of schools?

My bill will do four things:

           First, it will modify the rule so that it is phased in over five years rather than all at once on December 1. Most people I talk to think it ought to go up, just as I have said, but they do not think it ought to go up all at once. There is no need for that, so phase it in over five years.

           Second, make a significant increase on December 1, but then prohibit an increase in 2017 to give employers and employees an opportunity to adjust while our independent government watchdog, the Government Accountability Office, the GAO, studies the impact of the rule on American workers after the first year of implementation. So what I have said is that on December 1, the threshold goes up 50 percent, and then for one year it doesn't go up at all while the GAO studies the impact of that increase on colleges, church camps, businesses, workers, and others.

            Third, it would clarify that the administration does not have the authority to automatically increase the overtime threshold, which is currently set to occur automatically every three years, starting in 2020.

           Fourth, it would require a study of the rule's impact after the first year of implementation. If the study finds the impact is negative, the bill will exempt certain employers from future increases: non-profits, including churches, colleges, and universities; state and local governments; and many Medicaid- and Medicare-eligible facilities, such as nursing homes or facilities serving individuals with disabilities.

           These are employers who can't just raise prices. They are dependent on tax dollars or on charitable donations. And if they are in trouble because of this rule, our communities will lose critical services: surgeries for cleft palates, scouting opportunities, church camps for underprivileged kids, and others.

           This is not a partisan proposal. My bill is very similar to a bill introduced by House Democrat Kurt Schrader of Oregon and cosponsored by 10 Democrats and 7 Republicans. So my hope is that our Democratic colleagues will take a look at this bill and say that this is a reasonable, bipartisan proposal to apply more common sense to the overtime rule when it comes to the employees, employers, and non-profits that serve our country.

           Without these bills, on December 1, the salary threshold for overtime pay will more than double, from just over $23,000 to over $47,000. Representative Kurt Schrader, a Democrat, when he introduced his bill, said the following: “Since the Department of Labor's immediate phase-in date was announced, we've heard from business owners and their employees who are worried about implementing this increase overnight. Without sufficient time to plan for the increase, cuts and demotions will become inevitable, and workers will actually end up making less than they made before.”

Democratic Representative Schrader has 10 Democrats as cosponsors, including Congressman Jim Cooper from my state of Tennessee, who said: “I am hearing from lots of Middle Tennesseans who are worried about how this new rule will affect them. The overtime rule hadn't been adjusted in years and needed updating, but it's good to make commonsense changes and add flexibility so the rule works for all businesses and workers can actually have a chance to get ahead. We don't want to see lost hours or shifts in job responsibility.”

            I congratulate Senator Collins of Maine and Senator Lankford of Oklahoma for the legislation they introduced to delay the overtime rule's effect for 6 months. I support that bill, and I am glad the House of Representatives last night passed that bill, but I am also introducing this alternative for those in the body—especially my Democratic friends—who might not be willing to delay the implementation of the overtime rule, who believe it should go up, who believe it should go up as high as the president has proposed but not as fast as the president has proposed, and who believe the rule has created a problem for non-profits, such as the Boy Scouts, or surgeries for cleft palates or church camps. I hope they will seriously consider the proposal I have made today, along with Senators Collins, Lankford, Scott, and Flake.

           Over the next five weeks between now and the election, we will all be home. We will have a chance to see our Boy Scout leaders. We will have a chance to see our doctors and visit our churches. We can go by our colleges and ask how much this is going to raise the tuition at Maryville College, the University of Tennessee, the University of Wyoming, or wherever we may be. And if the fact is that most Americans feel that to impose this salary threshold on December 1 is too high and too fast, there will be two alternatives when we come back. One is to delay the rule for six months, and the other is to raise the threshold just as high as the president proposed but do it over five years. Take half of the increase in the first year, no increase the second year, and exempt non-profits, state and local governments, and many Medicare- and Medicaid-eligible facilities if they are negatively affected. This is similar to the commonsense proposal that Congressman Cooper talked about, that 11 Democrats as well as 7 Republicans have signed on to in the House, and that I hope will have serious consideration here.