Speeches & Floor Statements

Floor Speech: Overtime Rule CRA

Posted on June 7, 2016

I'm here to introduce a Congressional Review Act resolution of disapproval on the administration's so-called Overtime rule. I'm joined by Senator Johnson of Wisconsin in this effort and 43 other senators who are co-sponsors. While President Obama is running around talking about keeping college costs down, his administration has put out this so-called Overtime rule, which could raise tuition by hundreds of dollars for millions of American college students or cause layoffs at universities.

In Tennessee, for example, colleges report to me that they may have to raise tuition by anywhere from $200 per student, to $850 per student in one case because of this rule. The administration's new rule is a radical change to our nation's overtime rules. What they've done is double the threshold for overtime pay. Here's what that means. Hourly workers are usually paid for overtime work, but salaried workers generally don't earn overtime unless they're making below a threshold set by the Labor Department as required by the Fair Labor Standards Act.

Today, that threshold is $23,660. This administration is raising it to $47,476. The administration calls this the Overtime rule. I think we should call this the “Time Card” rule, or the “Higher Tuition” rule. This means a mid-level manager in Knoxville or Nashville, who is making $40,000 a year, is going to have to go back to punching a time card. This affects 4.23 million workers nationwide, nearly 100,000 in Tennessee. It's going to create huge costs for employers including small businesses, nonprofits like the Boy Scouts, colleges and universities. They have to decide whether to cut services, cut benefits, lay off or demote employees or create more part-time jobs or do a little of all of that. The University of Tennessee says if they increase everyone's salary to meet the new threshold, they'll have to increase tuition by over $200 per student on average, with some seeing as much as a $456 increase.

If they put all the salaried employees back on time cards, they face big morale issues. Listen to this letter that I received from a University of Tennessee employee who told me “currently I'm an exempt employee but I stand to fall under the non-exempt status under the new standards. While this may not seem like a major issue to many, I stand to lose a substantial amount of benefits if my status changes. The nature of my position does not ever cause me to work overtime as I work in an office from 8:30 to 4:30 daily and I'm salaried. If I'm reclassified it appears I'll lose 96 hours of annual leave per year as well as be subject to an almost 100 hour lower cap on accrued annual leave.” Another private college in Tennessee tells me it will cost them the equivalent of $850 per student in increased annual tuition if they don't lay off any employees.

As employers, they also face the cascade of regulations coming from the Labor Department. This rule should be called the “Time Card” rule because it will pull millions of American workers who climbed their way to salaried positions backwards, back to filling out a timecard and punching a clock, back to having fewer benefits, backward in their careers, back to being left out of the room, back to being left off e-mails and even out of the discussion.

Want to show your stuff at work? Want to get up early, leave late, climb the ladder, and earn the American dream like so many Americans have before you? Tough luck. Employers are going to say “don't come early, don't stay late, and don’t take time off to go to your kids' football game. Work your eight hours and go home. I don't have enough money to pay you overtime.”

This rule says the Obama administration knows best. They know how to manage your career, your work schedule, your free time, your income. They know better than you do. Today, someone who makes a salary of less than $23,660 must be paid overtime. Almost everyone agrees that threshold is too low and should begin to go up. Almost everyone said to the administration though, it's time to raise the number, but don't go too high, too fast or you'll create all kinds of destruction. They didn't listen. Now we're going to have these huge costs.

And let's talk about employers. Let's remember we're talking about nonprofits like Operation Smile, a charity that funds cleft palate operations for children. They say this rule may cost them 3,000 surgeries a year. Or the Great Smoky Mountain Council of Boy Scouts, my home council, they estimate $100,000 in annual costs because during certain seasons, employees staff weekend camping trips, which mean longer hours.

Many Americans are discouraged by this economic recovery. Many are still waiting for the recovery, but you don't grow the economy by regulations like this. The National Retail Federation says the rule will “curtail career advancement opportunities, diminish workplace flexibility, damage employee morale and lead to a more hierarchal workplace.” The U.S. Chamber of Commerce says “the dramatic escalation of the salary threshold, below which employers must be paid overtime for working more than 40 hours a week, will mean millions of employees who are salaried professionals will have to be reclassified to hourly wage workers.”

There are 16 million Americans, including 320,000 Tennesseans who are working part-time while looking for full-time work or who are out of work entirely. They need a vibrant economy. They don't need bureaucrats telling them how to manage their work schedule, their free time and their income. I know this is a good sounding rule, but it wrestles more and more control from the hands of Americans and small business owners and puts more power in Washington agencies.

Many of these rules, like this Overtime rule or the “Higher Tuition” rule or the “Time Card” rule, call it whatever you will, they won't stand the test of time. They'll end up in courts. They'll lose, or another president will come along and fix what's broken. But in the meantime, how many millions of dollars and hours of time are wasted as small business owners make excruciating decisions about how to implement these rules? My hope is that the Senate will vote to give this “Time Card” “Higher Tuition” rule an early death before business owners and nonprofits and colleges and universities begin the task of implementing it.