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By Ben Penn
May 11 — A Republican senator is searching for Democrats to join his legislative challenge to a controversial overtime regulation, days before the Labor Department is expected to finalize the rule.
Sen. Tim Scott (R-S.C.), one of the Republicans who introduced a bill (S. 2707) in March to block the rule (52 DLR A-1, 3/17/16), told Bloomberg BNA May 11 he must find Democrats to support the bill before it's moved to the floor.
“For our bill to have a successful path forward, I'm looking for a bipartisan coalition,” Scott said at the conclusion of a Senate Small Business and Entrepreneurship Committee hearing on the overtime rule.
“I’m going to continue to work on some of my friends on the left to join this,” Scott said. Asked if any Democrats have pledged to join his coalition, the senator responded, “Still working on them.”
The final rule is expected to double the salary threshold—to about $47,000 per year from $23,660 (82 DLR A-12, 4/28/16)—below which workers qualify for overtime pay. The regulation (RIN:1235-AA11) (125 DLR AA-1, 6/30/15), which is now under final review at the White House (50 DLR A-1, 3/15/16), has been hailed by Democrats in both chambers. They say it provides a long overdue economic boost for those working more than 40 hours per week.
Scott's bill, which was also introduced by Republicans in the House, would require the DOL to conduct further economic analysis on the regulation before it takes effect. The measure would obligate the department to take a closer look at the effect on nonprofit groups and small businesses, among other employers.
To get the 60 votes needed for the bill to pass in the Senate, Scott is hoping to seize on the apprehension voiced by the only two Democrats to speak at the hearing, he told Bloomberg BNA.
Sen. Heidi Heitkamp (D-N.D.) offered mixed reviews of the rule and said she shares Scott's concern about the DOL's process, such as its refusal to extend the public comment period.
“I think this is a pretty dramatic increase” to the salary threshold for the DOL “to do in a way that doesn't allow full analysis and full response,” Heitkamp said during the hearing. However, she also emphasized that “we have an economic problem for middle class families in this country who struggle every day to make ends meet.”
Heitkamp also acknowledged the adverse effects on nonprofits and universities that her Republican colleagues are citing in their opposition to the regulation.
Scott cited Heitkamp's remarks as a reason he is “hopeful” he might be able to build a Senate coalition large enough to successfully block the agency's rule from taking effect.
For now, Heitkamp isn't interested. “Sen. Heitkamp is not supporting Scott's bill,” her spokeswoman told Bloomberg BNA May 11.
The only other Democrat on the committee who spoke, Sen. Ben Cardin (Md.), was mostly supportive of the regulation, but he said he agrees with Heitkamp's calls for a more “open process.”
Even if the GOP could recruit enough Democrats to get the bill passed, President Barack Obama would almost certainly veto it. The president called on the DOL to write the regulation in a 2014 memorandum.
Republicans are also considering a Congressional Review Act motion of disapproval to oppose the regulation. Scott told reporters that any legislative attack on the rule, including an appropriations rider, that can “get across the finish line would be fantastic. How we get it there I don't know.”
During the committee hearing, three witnesses argued against the merits of the DOL's rulemaking. They called it overly costly for employers and restrictive to employee advancement and flexibility.
Tammy McCutchen, a principal at Littler Mendelson PC in Washington, told the senators that it was “irresponsible” for the DOL to have relied on nationwide data in its proposed rule, thereby failing to distinguish salaries by region or business size.
“The department's methodology and the amount of the increase are unprecedented in the FLSA's 77-year history,” said McCutchen, who was administrator of the DOL's Wage and Hour Division under President George W. Bush. “In my opinion, the department cannot justify increasing the minimum salary level for exemption above $35,000.”
Nancy Duncan, associate vice president of human resources at the nonprofit Operation Smile, an international medical charity, also cautioned lawmakers about the agency's rule. The proposed rule would limit Operation Smile's ability to employ managers, who are forced to work at all hours of the day to facilitate free surgeries for children and young adults overseas, Duncan said.
Two witnesses who favor the DOL regulation countered that argument by relating their own executive experience at nonprofits.
“The proposed overtime rule update will require our coalitions to examine and amend their employment practices,” Sarita Gupta, executive director of Jobs With Justice, said. “We think this is a positive development. A higher salary threshold will require us, and nonprofit groups like us, to promote practices that allow people to spend more time with their families.”
Ross Eisenbrey, vice president of the Economic Policy Institute, said it will not be burdensome for nonprofits like his to comply with the rule. “Employers, including small businesses like mine—we have 40 employees—will have no trouble adjusting to the rule because our competitors all face the same requirements,” Eisenbrey said.
The hearing was titled, “An Examination of the Administration’s Overtime Rule and the Rising Costs of Doing Business.”
While Heitkamp is not ready to join Scott's coalition on the Hill, a small group of Democrats in the House has been questioning the DOL's rule, also citing its effects on small businesses and nonprofits (73 DLR A-1, 4/15/16).
Sen. Angus King (I-Maine), who caucuses with Democrats, has agreed with House Democrats' concerns.
Advocates representing a coalition of employer groups that oppose the overtime rule also attended the hearing. Among them, Lizzy Simmons, senior director of government relations at the National Retail Federation, told Bloomberg BNA that the comments of Heitkamp and Cardin didn't surprise her.
“I think we are going to see, and we already have seen, bipartisan support and concern expressed, and hopefully that continues,” said Simmons, a former staffer for Scott.
Lawmakers from both parties are “hearing a lot from home about how devastating the impact of this rule is going to be,” Simmons added.
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