[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 2707 Introduced in Senate (IS)]

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114th CONGRESS
  2d Session
                                S. 2707

    To require the Secretary of Labor to nullify the proposed rule 
    regarding defining and delimiting the exemptions for executive, 
administrative, professional, outside sales, and computer employees, to 
require the Secretary of Labor to conduct a full and complete economic 
  analysis with improved economic data on small businesses, nonprofit 
 employers, Medicare or Medicaid dependent health care providers, and 
small governmental jurisdictions, and all other employers, and minimize 
  the impact on such employers, before promulgating any substantially 
   similar rule, and to provide a rule of construction regarding the 
salary threshold exemption under the Fair Labor Standards Act of 1938, 
                        and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 17, 2016

  Mr. Scott (for himself and Mr. Alexander) introduced the following 
  bill; which was read twice and referred to the Committee on Health, 
                     Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
    To require the Secretary of Labor to nullify the proposed rule 
    regarding defining and delimiting the exemptions for executive, 
administrative, professional, outside sales, and computer employees, to 
require the Secretary of Labor to conduct a full and complete economic 
  analysis with improved economic data on small businesses, nonprofit 
 employers, Medicare or Medicaid dependent health care providers, and 
small governmental jurisdictions, and all other employers, and minimize 
  the impact on such employers, before promulgating any substantially 
   similar rule, and to provide a rule of construction regarding the 
salary threshold exemption under the Fair Labor Standards Act of 1938, 
                        and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Protecting Workplace Advancement and 
Opportunity Act''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) The proposed rule of the Department of Labor entitled 
        ``Defining and Delimiting the Exemptions for Executive, 
        Administrative, Professional, Outside Sales and Computer 
        Employees'' (80 Fed. Reg. 38516 (July 6, 2015)) provides a 
        minimum salary requirement that would be--
                    (A) a 113 percent increase during the first year 
                after the final rule takes effect from the salary 
                threshold in effect on February 29, 2016; and
                    (B) an increase that would set the Federal minimum 
                salary threshold 20 percent higher than the minimum 
                salary threshold under any State law effective on the 
                date of enactment of this Act.
            (2) The Secretary significantly underestimated the cost of 
        compliance with the July 6, 2015, proposed rule. Public 
        comments calculate such rule will impose financial and non-
        financial costs substantially higher than those estimated by 
        the Department.
            (3) According to the Office of Advocacy of the Small 
        Business Administration, the initial regulatory flexibility 
        analysis of the July 6, 2015, proposed rule required under 
        section 603 of title 5, United States Code, failed to 
        adequately identify the number of small entities affected by 
        such rule and failed to address how such rule would affect 
        regions with lower costs of living and differences in certain 
        industries. On September 4, 2015, the Office of Advocacy of the 
        Small Business Administration submitted comments to the 
        Secretary regarding such rule, including recommendations to--
                    (A) reanalyze ``the economic impact of this rule on 
                small businesses'', to ``provide a more accurate 
                estimate of the small entities impacted by this 
                proposal'', and to ``include an analysis of industry 
                sub-sectors, regional differences, and revenue sizes'';
                    (B) reanalyze ``the number of small non-profit 
                organizations and small governmental jurisdictions . . 
                . that are affected by this rule and the economic 
                impact of this rule on these entities''; and
                    (C) provide greater transparency with respect to 
                ``compliance cost data'' and to ``utilize data provided 
                in the comment process to accurately estimate the human 
                resources and financial management costs of this 
                regulation''.
            (4) The Secretary did not consider the potential impact of 
        the July 6, 2015, proposed rule on workplace flexibility. 
        Public comments address concerns that employees who are 
        reclassified from exempt to nonexempt employees may no longer 
        be able to participate in workplace flexibility arrangements 
        and programs.
            (5) The Secretary did not analyze the potential impact of 
        the July 6, 2015, proposed rule on companies that operate in 
        multiple States with different costs of living and different 
        salary scales, and the costs and unique complications for these 
        employers associated with reclassifying thousands of employees 
        in multiple States.
            (6) The July 6, 2015, proposed rule automatically updates 
        the salary threshold on an annual basis for purposes of 
        defining employees subject to the exemption under section 
        13(a)(1) of the Fair Labor Standards Act of 1938 (29 U.S.C. 
        213(a)(1)) for all subsequent years, contrary to the 
        requirement under such section that the definitions applicable 
        for the exemption shall be ``defined and delimited from time to 
        time by regulations of the Secretary''. The Secretary does not 
        have the authority to increase the salary threshold on an 
        annual or other basis without conducting notice and comment 
        rulemaking with respect to each change in accordance with 
        section 553 of title 5, United States Code.
            (7) Although not proposed in the July 6, 2015, proposed 
        rule, the Secretary indicated that changes to the duties tests 
        may be included in the final rule, without providing for notice 
        and comment regarding the specific proposed revisions.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Department.--The term ``Department'' means the 
        Department of Labor.
            (2) July 6, 2015, proposed rule.--The term ``July 6, 2015, 
        proposed rule'' means the proposed rule of the Department of 
        Labor entitled ``Defining and Delimiting the Exemptions for 
        Executive, Administrative, Professional, Outside Sales and 
        Computer Employees'' (80 Fed. Reg. 38516 (July 6, 2015)) or the 
        final rule with respect to such proposed rule.
            (3) Medicare or medicaid dependent health care provider.--
        The term ``Medicare or Medicaid dependent health care 
        provider'' means an employer who derives more than 50 percent 
        of its revenue from payments under the Medicare program under 
        title XVIII of the Social Security Act, a State plan under the 
        Medicaid program under title XIX of such Act, or both.
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of Labor.
            (5) Small business; small entity; small government 
        jurisdiction; small organization.--The terms ``small 
        business'', ``small entity'', ``small government 
        jurisdiction'', and ``small organization'' have the meanings 
        given such terms in section 601 of title 5, United States Code.
            (6) Substantially similar rule.--The term ``substantially 
        similar rule'' means any rule or proposed rule that is a 
        reissuance of the July 6, 2015, proposed rule in substantially 
        the same form as such rule, or is the issuance of a new rule or 
        proposed rule that is substantially the same as the July 6, 
        2015, rule, including any rule that implements the provisions 
        of section 13(a)(1) of the Fair Labor Standards Act of 1938 (29 
        U.S.C. 213(a)(1)).

SEC. 4. CONDITIONS PRECEDENT FOR SUBSTANTIALLY SIMILAR RULES.

    (a) Enforcement.--
            (1) In general.--Beginning on the date of enactment of this 
        Act, the July 6, 2015, proposed rule shall cease to have any 
        force or effect.
            (2) Final rule.--In the case that the July 6, 2015, 
        proposed rule is a final rule on the date of enactment of this 
        Act--
                    (A) the Secretary shall not enforce the final rule 
                based on conduct occurring before such date of 
                enactment;
                    (B) an employee shall not have any right of action 
                against an employer for the employer's failure to 
                comply with the final rule at any time prior to such 
                date of enactment;
                    (C) any regulations that were amended by such final 
                rule shall be restored and revived as if the final rule 
                had never taken effect; and
                    (D) nothing in this Act shall be construed to 
                create a right of action for an employer against an 
                employee for the recoupment of any payments made to the 
                employee prior to the date of enactment of this Act 
                that were in compliance with such final rule.
    (b) Conditions for Substantially Similar Rules.--
            (1) In general.--The Secretary may promulgate any 
        substantially similar rule, subject to paragraph (3), only if 
        the Secretary has completed each action required under 
        paragraph (2).
            (2) Requirements for substantially similar rules.--The 
        actions required under this paragraph are the following:
                    (A) The Secretary shall conduct an analysis of the 
                impact of the substantially similar rule, including an 
                initial regulatory flexibility analysis under section 
                603 of title 5, United States Code and assessments 
                under clauses (i) through (iii) of section 6(a)(3)(C) 
                of Executive Order 12866 (5 U.S.C. 601 note, relating 
                to regulatory planning and review) to be provided to 
                the Administrator of the Office of Information and 
                Regulatory Affairs in accordance with such section, and 
                that--
                            (i) accurately identifies the number of 
                        affected small entities by using specific data 
                        points from the most recent publication of the 
                        Statistics of U.S. Businesses by the Bureau of 
                        the Census;
                            (ii) addresses regional, State, county (if 
                        applicable), metropolitan, and nonmetropolitan 
                        salary and cost of living differences;
                            (iii) provides an analysis of any 
                        substantially similar rule, which shall include 
                        the percentile of full-time salaried workers 
                        affected, and such analysis shall be 
                        disaggregated by--
                                    (I) State;
                                    (II) industry subsector;
                                    (III) small organizations;
                                    (IV) small government 
                                jurisdictions, including further 
                                disaggregation by school district;
                                    (V) nonprofit organizations;
                                    (VI) Medicare or Medicaid dependent 
                                health care providers; and
                                    (VII) small businesses;
                            (iv) provides an analysis of management and 
                        human resource costs for all employers, 
                        including costs associated with changing human 
                        resource systems, reclassifying employees, and 
                        extra hours spent scheduling employees;
                            (v) provides an analysis of the impact on 
                        lower-wage industries, including by geographic 
                        area;
                            (vi) provides an analysis of all non-
                        financial costs, including impact on 
                        employment, workplace flexibility, employee 
                        benefit structure for exempt and nonexempt 
                        workers, career advancement opportunities, new 
                        business formation, business termination, and 
                        loss of market share to foreign competition; 
                        and
                            (vii) includes a complete description of 
                        any significant alternative as described in 
                        section 603(c) of title 5, United States Code, 
                        to the substantially similar rule.
                    (B) The Secretary shall publish not less than one 
                small entity compliance guide under section 212 of the 
                Small Business Regulatory Enforcement Fairness Act of 
                1996 (5 U.S.C. 601 note) to assist small entities in 
                complying with the substantially similar rule.
                    (C) The Secretary shall provide notice of the 
                substantially similar rule in the Unified Agenda of 
                Federal Regulatory and Deregulatory Actions, compiled 
                by the Regulatory Information Service Center of the 
                General Services Administration.
                    (D) The Secretary shall ensure that the effective 
                date for any final rule with respect to the 
                substantially similar rule shall not be less than 1 
                year after the publication of such final rule in the 
                Federal Register.
                    (E) The Secretary shall comply with the notice and 
                comment requirements under section 553 of title 5, 
                United States Code, and provide a comment period of not 
                less than 120 days.
            (3) Automatic updates.--Any substantially similar rule 
        promulgated by the Secretary shall not contain any automatic 
        updates to the salary threshold for purposes of the exemption 
        under section 13(a)(1) of the Fair Labor Standards Act of 1938 
        (29 U.S.C. 213(a)(1)), in accordance with section 5.

SEC. 5. RULE OF CONSTRUCTION.

    The requirement under section 13(a)(1) of the Fair Labor Standards 
Act of 1938 (29 U.S.C. 213(a)(1)) that the definitions applicable for 
the exemption under such section be ``defined and delimited from time 
to time by regulations of the Secretary'' shall be construed to--
            (1) require the Secretary to issue a new rule through 
        notice and comment rulemaking in accordance with section 553 of 
        title 5, United States Code, for each change in any salary 
        threshold under such section 13(a)(1) proposed by the 
        Secretary; and
            (2) exclude any rule that would result in changes to any 
        salary threshold under such section for multiple time periods, 
        including through any automatic updating procedure.

SEC. 6. REQUIREMENTS FOR DUTIES TESTS.

    The Secretary may not promulgate any final rule that includes any 
provision revising any of the duties tests provided in part 541 of 
title 29, Code of Federal Regulations (or any successor regulation), 
for exemption under section 13(a)(1) of the Fair Labor Standards Act of 
1938 (29 U.S.C. 213(a)(1)) unless specific regulatory text for the 
provision was proposed in the proposed rule.
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