[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 3464 Introduced in Senate (IS)]

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114th CONGRESS
  2d Session
                                S. 3464

To provide incremental increases to the salary threshold for exemptions 
    for executive, administrative, professional, outside sales, and 
computer employees under the Fair Labor Standards Act of 1938, and for 
                            other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 29, 2016

 Mr. Alexander (for himself, Ms. Collins, Mr. Lankford, Mr. Scott, and 
Mr. Flake) introduced the following bill; which was read the first time

_______________________________________________________________________

                                 A BILL


 
To provide incremental increases to the salary threshold for exemptions 
    for executive, administrative, professional, outside sales, and 
computer employees 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 ``Overtime Reform and Review Act''.

SEC. 2. INCREMENTAL INCREASES TO SALARY THRESHOLD.

    (a) In General.--Section 13 of the Fair Labor Standards Act of 1938 
(29 U.S.C. 213) is amended--
            (1) in subsection (a)(1), by inserting ``subsection (k) 
        and'' after ``subject to''; and
            (2) by adding at the end the following:
    ``(k) Requirements for Salary Threshold.--
            ``(1) In general.--In promulgating regulations for purposes 
        of defining and delimiting the terms defining employees exempt 
        under subsection (a)(1), the Secretary shall require that any 
        employee exempt under such subsection is compensated at a rate 
        that is not less than the applicable salary threshold 
        established under paragraph (2).
            ``(2) Incremental increases.--
                    ``(A) Initial threshold.--The Secretary shall 
                establish an applicable salary threshold, beginning on 
                December 1, 2016, that is a rate of compensation equal 
                to $35,984 per year, or $692 per week.
                    ``(B) Subsequent increases.--Notwithstanding 
                subparagraph (A) and subject to paragraph (3), the 
                applicable salary threshold established under 
                subparagraph (A) may be increased to a rate of 
                compensation that is equal to--
                            ``(i) beginning on December 1, 2018, 
                        $39,780 per year or $765 per week;
                            ``(ii) beginning on December 1, 2019, 
                        $43,628 per year or $839 per week;
                            ``(iii) beginning on December 1, 2020, 
                        $47,476 per year or $913 per week; and
                            ``(iv) beginning on December 1, 2021, any 
                        rate of compensation provided by the Secretary 
                        in accordance with paragraph (4) and subsection 
                        (l).
            ``(3) Requirements for increases.--With respect to 
        nonprofit organizations (including nonprofit institutions of 
        higher education), Medicare or Medicaid dependent health care 
        providers, and State and local governments, the increases 
        provided in clauses (i), (ii), and (iii) of paragraph (2)(B) 
        shall occur only if--
                    ``(A) the Comptroller General of the United States 
                conducts and submits the study under section 3 of the 
                Overtime Reform and Review Act in accordance with that 
                section; and
                    ``(B) not later than June 1, 2018, the Comptroller 
                General, in coordination with the Secretary and the 
                Chief Counsel for Advocacy of the Small Business 
                Administration, certifies that the increase in the 
                salary threshold under paragraph (2)(A) from the salary 
                threshold in effect prior to December 1, 2016, has 
                not--
                            ``(i) resulted in an increased rate of 
                        part-time employment; or
                            ``(ii) negatively impacted workplace 
                        flexibility, benefit structures, career 
                        advancement opportunity, or job growth.
            ``(4) Salary threshold after december 1, 2021.--Not prior 
        to December 1, 2021, the Secretary may issue a rule through 
        notice and comment rulemaking in accordance with section 553 of 
        title 5, United States Code, to change the rate of compensation 
        for the applicable salary threshold under paragraph (2).
            ``(5) Rule of construction.--Nothing in this subsection 
        shall require the Secretary to promulgate the regulations 
        described in this subsection in accordance with the formal 
        rulemaking provisions of sections 556 and 557 of title 5, 
        United States Code.''.
    (b) Definitions.--Section 3 of the Fair Labor Standards Act of 1938 
(29 U.S.C. 203) is amended by adding at the end the following:
    ``(z) `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 established under title XVIII of 
the Social Security Act (42 U.S.C. 1395 et seq.), a State plan under 
the Medicaid program under title XIX of such Act (42 U.S.C. 1396 et 
seq.), or both.''.
    (c) Effective Date.--This section, and the amendments made by this 
section, shall take effect on December 1, 2016.

SEC. 3. GAO STUDY.

    (a) In General.--Not later than March 1, 2018, the Comptroller 
General of the United States shall conduct, and submit in accordance 
with subsection (c), a study on the implementation of the salary 
threshold provided under section 13(k)(2)(A) of the Fair Labor 
Standards Act of 1938 (29 U.S.C. 213(k)(2)(A)).
    (b) Contents.--The study under this section shall include each of 
the following:
            (1) The number of small entities affected by the increase 
        in the salary threshold provided under section 13(k)(2)(A) of 
        the Fair Labor Standards Act of 1938 compared to the salary 
        threshold in effect prior to December 1, 2016.
            (2) An analysis of the impact of such increase based on 
        regional, State, metropolitan, and nonmetropolitan salary data 
        and cost-of-living differences.
            (3) The percentile of full-time salaried workers affected 
        by such increase, including disaggregation by--
                    (A) State;
                    (B) industry subsector;
                    (C) small organizations;
                    (D) small government jurisdictions;
                    (E) nonprofit organizations;
                    (F) institutions of higher education as defined in 
                section 101 of the Higher Education Act of 1965 (20 
                U.S.C. 1001);
                    (G) Medicare or Medicaid dependent health care 
                providers, as defined in section 3 of the Fair Labor 
                Standards Act of 1938 (29 U.S.C. 203); and
                    (H) small businesses.
            (4) Management and human resource costs for all employers 
        in implementing such increase.
            (5) The impact of the increase on lower-wage industries, 
        including by geographic area.
            (6) All nonfinancial costs associated with the increase, 
        including the impact on employment (including rates of 
        unemployment and part-time employment), workplace flexibility, 
        employee benefit structures, career advancement opportunity, 
        new business formation and termination, and loss of market 
        share to foreign competition.
            (7) The impact of the increase on the number of individuals 
        in the United States who are ``marginally attached'' or 
        ``discouraged'' as defined by the Bureau of Labor Statistics.
    (c) Submission.--The study under this section shall be submitted to 
the Committee on Health, Education, Labor, and Pensions of the Senate, 
the Committee on Education and the Workforce of the House of 
Representatives, the Committee on Small Business and Entrepreneurship 
of the Senate, and the Committee on Small Business of the House of 
Representatives.

SEC. 4. ENFORCEMENT OF DEPARTMENT OF LABOR RULE.

    (a) In General.--Beginning on the date of enactment of this Act, or 
December 1, 2016, whichever date is earlier--
            (1) the rule submitted by the Department of Labor entitled 
        ``Defining and Delimiting the Exemptions for Executive, 
        Administrative, Professional, Outside Sales and Computer 
        Employees'' (81 Fed. Reg. 32391 (May 23, 2016)) shall cease to 
        have any force or effect;
            (2) the Secretary of Labor shall not enforce such rule 
        based on conduct occurring before or after such date;
            (3) an employee shall not have any right of action against 
        an employer for the employer's failure to comply with such rule 
        at any time prior to or after such date; and
            (4) any regulations that were amended by such rule shall be 
        restored and revived as if such rule had never taken effect.
    (b) Clarification.--Notwithstanding subsection (a), 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, or December 1, 
2016, whichever date is earlier, that were in compliance with the rule 
described in subsection (a)(1).

SEC. 5. FAIR LABOR STANDARDS ACT OF 1938 CLARIFICATION.

    (a) Sense of the Senate.--It is the sense of the Senate that 
section 13(a)(1) of the Fair Labor Standards Act of 1938 (29 U.S.C. 
213(a)(1)), including as in effect on the day before the date of 
enactment of this Act--
            (1) requires the Secretary of Labor to issue a new rule 
        through notice and comment rulemaking in accordance with 
        section 553 of title 5, United States Code, for each specific 
        and enumerated change to the salary threshold provided in 
        regulations promulgated under such section 13(a)(1), proposed 
        by the Secretary of Labor; and
            (2) prohibits any rule that would result in a change to the 
        salary threshold for which a specific and enumerated rate of 
        compensation for the salary threshold was not proposed, 
        including any procedure that automatically updates the salary 
        threshold.
    (b) FLSA Amendment.--Section 13 of the Fair Labor Standards Act of 
1938 (29 U.S.C. 213), as amended by section 2, is further amended--
            (1) in subsection (a)(1), by inserting ``in accordance with 
        subsection (l)'' after ``regulations of the Secretary''; and
            (2) by adding at the end the following:
    ``(l) Requirements for Updating the Salary Threshold.--
            ``(1) In general.--For any change to the salary threshold 
        provided in regulations promulgated under subsection (a)(1), 
        the Secretary shall--
                    ``(A) propose a specific and enumerated rate of 
                compensation required for an employee to be exempt 
                under such subsection; and
                    ``(B) issue a rule through notice and comment 
                rulemaking in accordance with section 553 of title 5, 
                United States Code.
            ``(2) Prohibition on automatic updates.--In accordance with 
        paragraph (1), the Secretary may not issue any rule that would 
        result in a change to the salary threshold provided in 
        regulations promulgated under subsection (a)(1) based on any 
        procedure that automatically updates the salary threshold 
        without taking each action required under paragraph (1).''.
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