In testimony before the House Education and Workforce Committee on Tuesday, March 16, 2016, U.S. Secretary of Labor Thomas E. Perez commented about several regulatory priorities and other U.S. Department of Labor (DOL) initiatives but did not provide any hint of what the proposed final Part 541 overtime regulations may contain. Despite comments about the impact of the DOL’s proposed significant salary increase and questions from several committee members, including Chairman John Kline (MN-2) and Congressman Tim Wahlberg (MI-7), who serves as Chair of the Workforce Protections Subcommittee, Secretary Perez noted that issuing a final rule is a top priority for the Department but that the ongoing rulemaking process prevented him from responding specifically.  Submission by the DOL’s Wage and Hour Division of  its proposed final revisions to the Fair Labor Standards Act’s (FLSA) Part 541 overtime regulations to the Office of Information and Regulatory Affairs (OIRA) of the Office of Management and Budget on Tuesday demonstrates just how high a priority the Department gives this initiative.

Among other priorities raised by Committee members at the hearing included various policies and priorities of DOL’s Employment & Training Administration to issue regulations implementing the Workforce Innovation and Opportunity Act which Congress passed in 2014.  Also, several concerns were voiced about the Department’s draft final Conflict of Interest Rule-Investment Advice, which OIRA has had under review since the DOL’s Employee Benefits Security Administration submitted it on January 28, 2016. Various committee members also raised questions about the final proposal from the DOL’s Office of Labor-Management Standards on Persuader Agreements: Employer and Labor Relations Consultant Reporting Under the LMRDA. OIRA received this draft final rule on December 7, 2015. Other Committee members, including Ranking Member of the Committee on Education and the Workforce Robert Scott (VA-3) encouraged Secretary Perez to complete the DOL’s initiatives during the remainder of this administration and complimented the Department on its work.

As noted earlier, OIRA review of the draft Part 541 overtime final rule is required under Executive Order 12866 since the Department’s proposal is “economically significant” in that its annual impact on the economy would be $100 million or more. OIRA review generally takes 30 days, but that time can be extended to as much as 90 days. In addition, the executive order provides that OIRA’s policy is to meet with and/or to accept communications from any interested party on any regulation under OIRA review. The OIRA Administrator, or a designee, will conduct such a meeting and maintain a log of attendees and any documents provided in the meeting, all of which will be made publically available. Ogletree Deakins’ Wage and Hour Practice Group is gathering information on those interested in meeting with OIRA or submitting any information to OIRA about the Department’s Part 541 proposal.

Previously, the DOL had stated that its final revisions to these regulations would be published in July of 2016. However, the delivery of the proposed final revisions to OIRA means that publication could occur sooner. This means that DOL could publish a final rule before July, assuming two possibilities do not occur. One is that OIRA does not return the draft final rule for further consideration by the DOL, and the DOL needs to resubmit a revised final rule; this prospect is unlikely unless, for example, DOL has not adequately analyzed the costs and benefits of its proposed final rule. The other is that OIRA acts more expeditiously in reviewing this proposal than its average review time of 53 days that is based on the 712 rules submitted during 2003, according to its website. Given the administration’s investment in this initiative, we should expect it to do whatever it can to make sure that OIRA reviews the proposed Part 541 final rule as expeditiously and as quickly as possible. This push to publish a final rule before July of 2016 may indicate that the Obama administration wants to be in a position to veto any resolution that Congress may pass under the Congressional Review Act (CRA)—which gives Congress 60 legislative days from receipt of a final rule to pass a resolution disapproving the final rule and preventing it from going into effect. The final regulations will have an effective date of at least 60 days after publication.

In another development, legislation has been introduced on Thursday, March 17, 2016, in both the U.S. Senate and House of Representatives, to deny the DOL’s proposed rule of July 6, 2015 from having any force and effect and requiring the DOL to conduct a more thorough economic analysis. The “Protecting Workplace Advancement and Opportunity Act,” S.2707 and H.R. 4773, was introduced in each respective Chamber by Senator Tim Scott (SC) and Lamar Alexander (TN) and Congressman Tim Walberg and John Kline. The bill would require the DOL to: (1) analyze the impact of a final rule comparable to or substantially similar to the proposed rule upon small businesses, non-profit entities, etc.; (2) analyze the impact upon low-wage industries and geographic areas of the country; (3) provide a one-year time frame after publication before such a final rule could be effective; and (4) not include any provision to automatically index the salary amount. While there is no guarantee even in this Congress that it perhaps could pass such legislation, the administration certainly would veto it if it were to pass.     

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