New Overtime Rule in the Crosshairs in Congress

Employment Law

Forty-five Republican Senators, led by Senate HELP Committee Chairman Lamar Alexander (R-TN), moved to block the Department of Labor's new overtime regulation this week, as a House Committee explored the regulation's ramifications for both employers and employees.  The Senators filed a motion under the Congressional Review Act, which can be passed by a simple majority in each chamber of Congress, but a likely veto by President Obama would require a two-thirds vote to override.  Also this week, the House Committee on Education and the Workforce heard testimony from witnesses focusing on the economic impact the new rule will have on companies, educational institutions, and non-profits.  They noted that it will not only raise costs for businesses, but it will also stymie the upward mobility of previously exempt employees by cutting the hours they will be allowed to work.  Seyfarth Shaw partner Alex Passantino, a former acting Wage & Hour Administrator, observed that employers may be forced to limit the use of mobile technology by workers to avoid overtime pay liability.  While the Wage & Hour Division plans to seek comments soon on the conflict between the 1938 law and modern technology, Passantino noted that due to the December 1 effective date of the new rule: "Unfortunately employers don't have the luxury of waiting for the Department to adjust to the modern scheme."  Workforce Protections Subcommittee Chairman Tim Walberg (R-MI) gave an example of a man who started his career as a fast-food restaurant worker and worked his way up to be an industry executive, in an effort to illustrate how the opportunity to expand capabilities will be significantly diminished by this rule.