[Congressional Record Volume 162, Number 89 (Tuesday, June 7, 2016)]
[Senate]
[Pages S3544-S3545]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
By Mr. ALEXANDER (for himself, Mr. Johnson, Mr. McConnell, Mr.
Barrasso, Mr. Boozman, Mr. Cassidy, Mr. Coats, Mr. Cochran, Ms.
Collins, Mr. Corker, Mr. Cornyn, Mr. Cotton, Mr. Crapo, Mr.
Cruz, Mr. Daines, Mr. Enzi, Mrs. Ernst, Mrs. Fischer, Mr.
Flake, Mr. Gardner, Mr. Graham, Mr. Hatch, Mr. Heller, Mr.
Hoeven, Mr. Inhofe, Mr. Isakson, Mr. Lankford, Mr. Lee, Mr.
McCain, Mr. Moran, Ms. Murkowski, Mr. Paul, Mr. Perdue, Mr.
Risch, Mr. Roberts, Mr. Rounds, Mr. Rubio, Mr. Scott, Mr.
Sessions, Mr. Shelby, Mr. Thune, Mr. Tillis, Mr. Vitter, Mr.
Wicker, and Mr. Sullivan):
S.J. Res. 34. A joint resolution providing for congressional
disapproval under chapter 8 of title 5, United States Code, of the rule
submitted by the Department of Labor relating to defining and
delimiting the exemptions for executive, administrative, professional,
outside sales, and computer employees; to the Committee on Health,
Education, Labor, and Pensions.
Mr. ALEXANDER. Mr. President, I am here today to introduce a
Congressional Review Act resolution of disapproval on the
administration's so-called overtime rule. I am joined by Senator
Johnson of Wisconsin on this effort and also 43 other Senators who are
cosponsors.
While President Obama is running around talking about keeping college
costs down, his administration has put out this so-called overtime rule
that could raise tuition by hundreds of dollars for millions of
American college students or cause layoffs at our colleges and
universities. In Tennessee, for example, colleges report to me that
they may have to raise tuition by anywhere from $200 a student to $850
a 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 have done is doubled the salary threshold for
overtime. Here is what that means. Hourly workers are usually paid for
overtime work, but salaried workers generally don't earn overtime
unless they are 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 all at one time 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
that a midlevel manager in Knoxville or Nashville who is making $40,000
a year is going to have to go back to punching a time card.
The rule affects 4.23 million workers nationwide and nearly 100,000
in Tennessee. It is going to create huge costs for employers, including
small businesses, nonprofits, such as the Boy Scouts, and 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 that if they increase everyone's
salaries to meet the new threshold, they will 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 will
face big morale issues.
Listen to this letter I received from a University of Tennessee
employee:
Currently, I am 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 8:30-4:30 daily and I
am salaried. If I am reclassified, it appears I will 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 a student if they don't lay off any employees.
As employers, they also face the cascade of regulations that is
coming from the Labor Department.
This rule should be called the ``time card'' rule because they are
going to pull millions of Americans who have climbed their way to
salaried positions backwards--back to filling out a timecard and
punching a clock, back to having fewer benefits, backwards in their
careers, back to being left out of the room, back to being left off
emails and even out of the discussion.
Want to show your stuff at work? Want to get up early, leave late,
climb the ladder, earn the American dream the way that so many
Americans have before you? Tough luck. Employers are going to say:
Don't come early. Don't stay late. Don't take time off to go to your
kids' football game. Work your 8 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, and your
income. They know better than you do.
Today, somebody who makes a salary of less than $23,660 must be paid
overtime. Almost everyone agrees that threshold is low and should begin
to go up. Almost everyone said to the administration: It is time to
raise the number, but don't go too high, too fast or you will create
all kinds of destruction.
They didn't listen, so now we are going to have these huge costs.
Let's talk about employers. Let's remember that we are talking about
nonprofits like Operation Smile, which is a charity that funds cleft
palate operations for children. They say this rule will mean 3,000
fewer surgeries a year. Then there is the Great Smoky Mountain Council
of the Boy Scouts, my home council, which estimates $100,000 in added
annual costs because during certain seasons, employees staff weekend
campouts and recruitment events, which mean longer hours.
Many Americans are discouraged by this economic recovery. Millions
are still waiting for the recovery. But you don't grow the economy by
regulations such as this.
The National Retail Federation says the rule will ``curtail career
advancement opportunities, diminish workplace flexibility, damage
employee morale, and lead to a more hierarchical workplace.''
[[Page S3545]]
The U.S. Chamber Commerce says: ``The dramatic escalation of the
salary threshold, below which employees 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
Washington 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 the overtime rule or the ``higher tuition''
rule or the ``time card'' rule--call it whatever you will--won't stand
the test of time. They will end up in courts and they will lose, or
another President will come along and fix what is broken. But in the
meantime, how many millions of dollars and hours of time will be 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 by December.
The PRESIDING OFFICER. The Senator from Wisconsin.
Mr. JOHNSON. Mr. President, I rise first to say thank you to the
Senator from Tennessee for leading this vote of disapproval on what is
really a terrible rule. It is a solution looking for a problem.
I spent 31 years running a manufacturing plant. It has been my
experience that I have never had somebody in my operation ask to go
from salary to hourly. I remember in 2004 when they tightened the rules
and a number of people who worked for me were forced into hourly. None
of them wanted to go. By the way, none of them received higher wages or
a higher salary; they just lost flexibility--and that is exactly what
is going to happen.
Being an accountant, I would like to kind of go through the numbers.
These are the Department of Labor's own calculations. They claim there
would be $1.2 billion more wages paid to workers. That is what they
claim the benefit is going to be, but they also admit that there will
be $678 million in compliance costs to businesses just trying to figure
out the rule, trying to implement it.
What they are missing is, if wages--and I think that is a big ``if''
because I think what will end up happening is--you know, employers are
competing in a global economy, and you can't just increase costs. So my
guess, basically, is what is going to happen--and happened to my
business in 2004--is they will just adjust. The workers won't get any
more money. But let's just say $1.2 billion in wages is paid to
workers. Well, that will be a cost to businesses. So as far as the
overall benefit to the economy, wages might increase $1.2 billion, but
business costs will increase $1.2 billion, and that nets to zero
benefit to the economy. But there will still be a $678 million
compliance cost to businesses, and, of course, that will be added to
the already onerous regulatory burden on our economy.
There are three different studies--the Small Business Administration,
the Competitive Enterprise Institute, and the National Association of
Manufacturers--putting the cost of complying with Federal regulation
somewhere between $1.75 trillion to over $2 trillion per year. If you
take the medium estimate of that and divide it by 127 million
households, that is a total cost of compliance with Federal regulations
of $14,800 per year, per household. The only larger expense to a
household is housing. That is the cost of complying.
Let me finish with another figure--$12,000 per year, per employee.
That is the cost of just four Obama regulations to one Wisconsin paper
manufacturer. I can't tell you which one because the CEO fears
retaliation. Now, think of that for a minute. But just four Obama
regulations are costing one paper manufacturer the equivalent of
$12,000 per year, per employee.
So if you are concerned about income inequality, if you are wondering
why wages have stagnated, look no further than this massive regulatory
burden, and of course the overtime rule is just one of those burdens. I
would just ask everybody, would you rather have that $12,000 feeding
the government in compliance costs or would you rather have that
$12,000 in your paycheck feeding your family?
Making a living is hard. Big Government just makes it a whole lot
harder, and this overtime rule is just going to make it that much more
incrementally harder.
Mr. ISAKSON. Mr. President, I rise for a few minutes to compliment
Chairman Alexander and Senator Johnson for their resolution of
disapproval on the overtime rule.
When I came into the Chamber, Lamar Alexander was making his speech,
followed by Senator Johnson. I listened closely, because I got a phone
call last week from Bryant Wright, the pastor at the Johnson Ferry
Baptist Church in Marietta, GA. They are one of the largest Baptist
churches in my State. They provide daycare. They provide early
childhood development. They provide sports activities. They provide
vacation Bible school--a 24/7 program for underprivileged kids.
The unintended consequence of what I am sure is a well-intended
regulation is that a 24-hour-a-day camp counselor at Johnson Ferry
Baptist Church for their vacation Bible school will be paid regular pay
for 8 hours and then have to be paid time and a half for the other 16
hours of the day they are with the child under the application of the
rule. You are going to price the Johnson Ferry Baptist Church out of
the business of providing for underprivileged children. And what is
going to happen? Those people are going to come to the government for
the government to provide that service.
So what this will do is take a church out of the business of helping
human beings and put the government in the position of having more
demand for taxpayers to fund services that would have been provided
anyway.
I commend Chairman Alexander. I commend Senator Johnson and others. I
urge all my colleagues to join them in the resolution of disapproval in
the overtime rule. It is wrong for America. Its consequences are
unintended, but they are devastating. I urge everybody to vote in favor
of it, and I appreciate Senator Alexander for his leadership in
introducing that joint resolution.
I yield the floor.
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