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Senator Lankford Introduces Bills to Delay Overtime Rule and Protect Small Businesses, Colleges and Nonprofits

WASHINGTON, DC – Senator James Lankford (R-OK) today introduced legislation to delay the new Department of Labor federal overtime rule that is extremely burdensome to small businesses, colleges and nonprofits. The bill, called the Regulatory Relief for Small Businesses, Schools and Nonprofits Act (S. 3462), would delay implementation of the rule six months from its current date of December 1, 2016 to June 1, 2017.

On May 18, President Obama and Department of Labor Secretary Tom Perez finalized this rule to update overtime regulations, which will automatically extend overtime pay to over 4 million workers within the first year of implementation. The rule will require employers to pay overtime to salaried workers earning less than $47,476 a year, double the current threshold of $23,660.

Senators Lamar Alexander (R-TN), chairman of the Health, Education, Labor & Pensions Committee, and Susan Collins (R-ME) signed onto the bill as original co-sponsors. By a bipartisan vote of 246-177, the House yesterday passed this exact bill, which was sponsored by Rep. Tim Walberg (R-MI), chairman of the House Subcommittee on Workforce Protections.

“This federal overtime rule is devastating for small businesses, colleges and nonprofits all across America, but particularly in states with a low cost-of-living,” said Senator Lankford. “The economic realities and regional cost of living differences that exist throughout the country were completely ignored in favor of yet another one-size-fits-all approach taken by the Obama Department of Labor.  This regulation will hurt families across the nation and will create one more barrier to people trying to rise to the middle class. I have been told from small business owners, colleges and nonprofits that this federal overtime rule will quickly lead to job loss, increased tuition, and the reduction of charitable services. I think this rule should be pulled entirely, but at least its implementation should be delayed or slowed.”

“The administration’s overtime rule goes too high, too fast—as is, it will cut workers’ hours, limit their workplace benefits and flexibility, and harm our country’s non-profits, colleges, and universities” said Chairman Alexander. “Forty-nine percent of business owners in this country say they aren’t even aware of this rule that goes into effect on December 1—two months away. Congress needs to delay this rule and give hard-working Americans the time necessary to prepare.”

“The Department of Labor’s overtime rule will be extremely damaging to small businesses, universities, nonprofit organizations, and service industries, particularly in rural states like Maine,” said Senator Collins. “While I support an increase in the salary threshold, a huge and sudden increase like this could hurt workers and employers alike and limit the services provided by nonprofits and educational institutions. Our legislation would delay the implementation of this rule for six months, providing Congress with additional time to assess and prevent the adverse effects of this major federal rule change.”

In reference to this bill, NFIB President and CEO Juanita Duggan said, “It’s impossible for many small businesses to meet the December 1 deadline, and the clock is ticking. In just a few weeks, many thousands of small businesses could face heavy penalties for being out of compliance. NFIB is demanding that the Senate take action immediately. Small employers typically do not have HR departments and compliance professionals to help them implement massive new rules like this. Complying with this regulation will be complicated, time-consuming, and expensive.”

Lankford also today co-sponsored legislation to change the timeline for implementation of the overtime rule. The Overtime Reform and Review Act would stretch out over five years the administration’s increase in the salary threshold for overtime pay. The bill would direct the administration to make increases in four stages over a five-year period to give American workplaces time to adjust to the rule. Chairman Alexander introduced this bill and Senators Collins, Tim Scott (R-SC), and Jeff Flake (R-AZ) also co-sponsored it. In the House, this bill is sponsored by Democratic Congressman Kurt Schrader of Oregon.  

Senator Lankford is chairman of the Senate Homeland Security and Governmental Affairs Subcommittee on Regulatory Affairs and Federal Management, which has oversight of the federal regulatory process and federal agency workforce falls under its jurisdiction. The subcommittee has held more than 15 hearings and roundtables on regulatory process, and it has produced five pieces of legislation to improve the regulatory process.