House Hearing Underscores Impact of Proposed Overtime Rule on Flexibility, Career Advancement

Employment Law

In a hearing this week on DOL's proposed expansion of FLSA overtime coverage, House Workforce Protections Subcommittee Chairman Tim Walberg (R-MI) said that of all the concerns he had heard, "I find most alarming that it will limit flexibility and opportunity in the workplace."  He also joined other Republicans in raising concerns over the negative impact the proposed rule would have on job growth and career advancement for ambitious low-wage workers.  Rep. Mike Bishop (R-MI) observed, "One of the biggest concerns that I get from my constituents … is the growing administrative burden and costs of these new regulations."  The proposal would increase the minimum salary for "white collar" exemptions from the current $455 per week ($23,660 per year) to an estimated $970 per week ($50,440 per year), but it does not, as had been feared, establish for those above that pay level a ceiling on the maximum percentage of the amount of time an exempt employee could spend performing nonexempt duties before she or he would lose the exemption.  Tammy McCutchen, the former head of DOL's Wage and Hour Division, warned that the DOL could still significantly complicate the duties tests in the final rule without first proposing any specific language, noting that the Department raised a number of questions about the tests in the proposal.  HR Policy Association submitted a statement for the record which noted "the proposed rule would dramatically increase the number of employees covered by the nation's arcane overtime law without overhauling the rules to reflect changes in the modern, digital workplace," and "could require employers to carefully monitor and track the time their managers spend performing concurrent nonexempt duties—thereby reducing workplace flexibility, efficiency, and customer service."  Separately, 144 Congressional Democrats sent a letter to President Obama urging the administration to "move without delay" to implement a higher salary level test in the proposed rule.  Notably, the letter did not call for any changes to the duties tests.