The House Education Subcommittee on Workforce Protections held a hearing this week to examine the potential impact the Department of Labor’s (DOL) proposed overtime rule could have on employees and employers across the country. The proposed rule would increase the salary threshold amount from $35,568 to $55,068 or more and automatically increase the amount every 3 years.

Subcommittee Chairman Kevin Kiley (R-CA) stated his concern that the current proposal from the Biden Administration is similar to the proposal during the Obama Administration, which was “poorly conceived and extreme.” He also questioned whether rulemaking of this significance at DOL under an acting-Secretary is appropriate. His statement reflected his concerns specifically about small businesses and non-profits, including colleges and universities, and the impact of the proposal on employees and students.

Kiley also expressed particular concern about the automatic 3-year adjustments that are part of the proposal, saying, “The most concerning part about this rule is that it puts the policy on autopilot. Future changes should be subject to the regular policy review, including consulting with stakeholders, rather than a one size fits all formula. Automatic increases are bad policy and bad government practice.”

Witnesses included business owners and labor and employment legal experts. Most witnesses argued against the proposal and expressed similar concerns to the chairman about the negative effects on employers and employees, including cost increases, layoffs, and job reclassifications. The witness also argued that the DOL should withdraw its proposal entirely at this time, particularly as the workforce is still recovering from the effects of the pandemic.

Several Democratic subcommittee members and one witness from the National Employment Law Project (NELP) spoke in favor of the proposal saying it was long overdue and time for employers to pay employees a fair wage for hours worked. Judy Conti, the director of government affairs at NELP, testified that “Employers have many tools available to manage the new overtime obligations. Employers can increase salaries and hire additional staff.”

The overtime rule proposal was announced by DOL on August 30, and was published in the Federal Register on September 8. There was a 60-day comment period that closed on November 7. NAICU submitted comments as did many NAICU institutions. A final rule is expected next year.