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Business and Policy Areas
Business and Policy Areas

Overtime Rule Draws Scrutiny

March 21, 2016

The Office of Management and Budget (OMB) is currently reviewing a U.S. Department of Labor (DOL) final rule on overtime pay.

DOL sent its final rule to OMB earlier than expected. There is currently no publicly available information on the content of the final rule or indication of when it would go into effect; however, the OMB clearance process typically takes four to eight weeks, making an April or May issuance of a final rule possible.

The accelerated timeline may be the result of a combination of pressure points. First, the House of Representatives and the Senate have introduced legislation that would prevent DOL from finalizing the proposed rule. The Protecting Workplace Advancement and Opportunity Act does not prevent an increase in the salary threshold, but requires DOL to conduct an economic impact study of any rule on small businesses, nonprofits, institutions of higher education, and others; and demands that changes to the duties tests be made available for public review and comment.

The legislation was introduced in the Senate and by Sen. Tim Scott (R-SC) and co-sponsored by Sen. Lamar Alexander (R-TN), and in the House by Rep. Tim Walberg (R-MI) and co-sponsored by Rep. John Kline (R-MN). During a hearing last week, Alexander argued that the new rule could increase the cost of college for students.

In addition, the Obama administration faces a possible hurdle in a Congressional Resolution of Disapproval of the final overtime rule. This is a complex legislative procedure that could nullify the new regulation.

On September 4, 2015, NACUBO joined 17 higher education associations in a letter to DOL, responding to a July 6 notice of proposed rulemaking that makes significant changes to the overtime provisions of the Fair Labor Standards Act (FLSA). NACUBO is continuing to work closely with CUPA-HR and others to respond appropriately. CUPA-HR co-chairs the Partnership to Protect Workplace Opportunity (PPWO) along with the Society for Human Resource Management.


Mary Bachinger
Director, Tax Policy

Liz Clark
Senior Director, Federal Affairs