Washington, D.C. – U.S. Sen. Jeff Flake (R-Ariz.) yesterday joined his colleagues in introducing two pieces of legislation that would protect small businesses, colleges, and nonprofits from the Department of Labor’s (DOL) costly new overtime rule.
The DOL’s rule on overtime, effective December 1, requires employers to pay overtime to salaried workers earning less than $47,500 a year, a figure that more than doubles the current overtime salary threshold of $23,660. In order to comply with the rule and keep their doors open, small businesses and nonprofits will likely be forced to move employees to hourly positions. This will result in fewer employees altogether and fewer benefits for those employees that remain as well as additional compliance costs as they are forced to comply with the complex rule. Arizona is one of 21 states that has filed suit to challenge the legality of the rule, citing the undue burden it places on businesses and the strain it puts on state budgets.
In response, Flake joined Sens. Lamar Alexander (R-Tenn.), Susan Collins (R-Maine), James Lankford (R-Okla.), and Tim Scott (R-S.C.) in introducing the Overtime Reform and Review Act, a bill that gradually phases in the increased salary threshold over the next five years. In addition, if the Government Accountability Office finds adverse impacts of the rule after the first year, a number of segments of the economy will be exempt from further increases in the salary threshold. U.S. Rep. Kurt Schrader (D-Ore.) introduced a similar bill in the House.
Flake also joined his colleagues, including Lankford, Scott, Alexander, and Collins, in introducing the Regulatory Relief for Small Business, Schools and Nonprofits Act, a bill to delay DOL’s overtime rule by six months outright.
“With our economy sputtering, the last thing our employers need is another layer of red tape like the ill-conceived overtime rule that decreases flexibility and increases regulatory costs. This bill takes a bipartisan approach to providing relief for Arizona employers immediately,” said Flake.
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