Almost four dozen Republican senators signed on to a bill Tuesday to roll back the Labor Department’s new overtime rule, arguing it would harm the economy.
College students in particular would be hit hard, they argued, because the rule is expected to vastly increase labor costs at institutions of higher learning, leading in turn to tuition increases.
“The number one component of a solution to the problems facing America is economic growth. Yet a growing federal regulatory burden that imposes as much as $2 trillion a year in costs on the American economy stifles growth. Now, the Obama administration is adding yet another regulation that will increase costs to businesses, nonprofits and colleges, depress entrepreneurial spirits and cause negative unintended consequences for employees,” said Sen. Ron Johnson, R-Wis.
Ordinarily, federal law says employees must be paid time and a half once they work more than 40 hours in a week. However, businesses may exempt workers from the requirement if their duties are “managerial” in nature. Prior to last month, one of the requirements was that the worker had to make at least $23,000 annually before he or she could be exempted. Under the new rule, the minimum is set at about $47,000. The change, announced last month, will take effect Dec. 1.
The Obama administration has argued that exemption was widely abused by unscrupulous employers who deemed regular employers to be managers as a way to avoid paying them overtime. Labor Department officials have projected that the new rule would extend overtime coverage to 4.2 million additional workers. Because it was a reinterpretation of an existing rule under the Fair Labor Standards Act, congressional approval was not needed for the change.
“Companies will have a choice to make: Either they pay their workers overtime or they cap the work week at 40 hours. Either way, the worker wins,” Vice President Joe Biden told reporters last month.
The GOP senators are seeking to roll back the rule under the Congressional Review Act, which allows lawmakers to nullify a new regulation within 60 days of it being formally issued. Unlike other legislation, a CRA bill cannot be filibustered. It can be vetoed by the president, however, and thus CRA efforts have rarely succeeded. Republicans vowed to try against the new overtime new rule despite lacking a veto-proof majority.
Republican critics such as Sen. Lamar Alexander, R-Tenn., have zeroed in on the fact that the new rule will extend coverage to a variety of jobs, such as teaching assistants, that will vastly expand labor costs at colleges and universities.
“If the president wants to go around talking about keeping college costs down, how can he justify a rule that, according to one Tennessee independent college, could cost their students nearly $850 per year in increased tuition? There is no question that this rule also hurts those American workers it’s intended to help, through reductions in their hours and diminished workplace flexibility,” he said.
A Labor Department spokesman could not be reached for comment.
