Statements on Introduced Bills and Joint Resolutiions

Floor Speech

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Mr. LANKFORD. Mr. President, I wish to join Senator Alexander in discussing this overtime rule.
As he mentioned multiple times, Senator Collins and I dropped a companion bill here in the Senate that was passed in the House that delays the overtime rule's implementation by 6 months. As he also mentioned, I am most certainly a cosponsor of his bill as well. That is another approach, and, quite frankly, we are all looking for different approaches to be able to accomplish something that needs to be done and needs to be done immediately; that is, to address a regulation which has been put in place that can have serious, I believe, unintended consequences but most certainly serious consequences across our economy.

That is not an accusation that this administration wants to be able to damage the economy, wants to be able to damage small businesses, or wants to be able to damage universities and nonprofits. But I believe absolutely that is what is occurring. I am concerned, though, that the administration seems to have been deaf to the message that has come up over and over again from many of us in the Congress to be able to highlight that these are serious issues. Have you evaluated them? The Small Business Administration even has real concerns that the data they presented to the Department of Labor was not used, and the advocate for small businesses within the Department of Labor is challenging the Department of Labor to say: Why didn't you use the data that we provided to be able to evaluate this?

There are a lot of questions about how the regulation itself was promulgated or what the end goal is, but let me tell you what the real consequences are on the ground. I will give a couple of hypothetical situations, and then I will go into some practical ones.

Right now, a single mom with a couple of kids at home is able to telecommute into work a couple of days from her particular job as maybe a sales marketing manager. She can be in the office for 3 days, telecommute a couple of days, save child care costs, and this gives her some flexibility. Under this rule, those same places would not typically allow someone to telecommute because they have to see exactly the hours that someone is working. So she would have to physically be present in the office every day so the work hours could be tracked, removing that flexibility and causing her increased child care costs and actually moving her to more of a situation where she is in a more structured environment, less suitable for her kids.

I will give another thought on this. What if we reach into a situation that many of us face as many of the millennials now leaving college are going into the workforce, well-trained, well-equipped, wanting to get an assistant manager's position or wanting to be able to work into a salaried position. It will be much more difficult for those individuals coming out of college now to land a salaried position because, overall, companies around the country that are hiring don't want to hire salaried positions anymore; they want to be able to hire hourly people. So it will be tougher for the generation coming out of college right now to be able to land in those early management positions.

Is that a hypothetical situation? No. I would say it is already occurring. It is already happening around the country. When I was home in August, traveling around the State, this overtime regulation was the No. 1 question that came up when I talked to any business owner, any business person, any manager. The first thing they raised was the coming overtime rule, both in its complexity and in trying to figure out how to be able to actually implement this into the cost of their business.

The conversations were already occurring with employees where they were moving someone from a salaried position to an hourly position, and their employees hated it because they liked working to a spot where they were in a salaried position.

During the August time period, I had a conversation with a youth pastor at a church. That youth pastor said they had left a conversation with their pastor just a couple of days before in which their pastor said: You are going to have to start documenting your hours--each hour that you are actually working with kids, even your time at home that you are preparing a Bible study to actually teach the kids--because we can't afford for you to go over 40 hours.

This is someone who feels a calling to be able to work with students, and literally their pastor has to tell them: I know you want to help.

You can't help more than 40 hours. Most youth pastors don't go into youth ministry because they anticipate getting wealthy in it. They go into it because of a sense of calling and passion to be able to help students. This regulation is telling that person: Turn down your passion to work with the next generation. You are limited in what you can actually do, and, if you choose to volunteer beyond that, you put your employer, that church, at risk.

The Osage Nation--their HR folks, William Scott Johnson, said this:

I'm an HR professional at the Osage Nation and am concerned about the impact that changes to the overtime regulations will have on my organization and employees. NAFOA has heard from tribal governments who are concerned the use of a single national salary threshold would adversely affect already limited revenues, especially for tribes in rural areas.

From the YWCA battered women's shelter:

I'm a human resource (HR) committee member at the YWCA Battered Women's Shelter and am concerned about the impact that changes to the overtime regulations will have on this nonprofit organization and employees. All employees make less than $50,000 except top management. The impact of this new legislation could be catastrophic for payroll as employees will have to be moved from exempt to non-exempt status simply due to the salary base being proposed.

The Counseling & Recovery Services of Tulsa, Oklahoma, wrote me:

I am the executive human resource (HR) professional at Counseling & Recovery Services of Oklahoma, a nonprofit community mental health center, and am concerned about the impact that changes to the overtime regulations will have on my organization and employees. As a nonprofit, our agency is clinical staffing heavy; thus, about 80% of our workforce . . . will be impacted. The costs to meet the proposed regulations are expected to be in the 100s of thousands [of dollars] and will have a devastating impact to the community mental health industry overall.

I received a note from a small business owner in Edmond, right in my hometown. They said:

The proposed changes will require us to make significant changes [in the way we do business]. If the proposed salary threshold moves forward, we will be forced to change all our employees to hourly, which will result in the elimination of our bonus program. Our salaried managers make a significant amount of their income based on performance bonuses.

Calculating bonuses for employees that have potential overtime is extremely complicated, labor intensive and opens up a huge liability risk if miscalculations occur.

One of the universities in my State wrote me and said about this rule:

Essentially, it would turn millions of dollars of professional, salaried jobs into hourly positions overnight, resulting in limited flexibility for workers and increased costs for colleges, universities, other nonprofits and public-sector employers that operate on very tight budgets as we attempt to keep the cost of education as low as possible for constituents.

We do not disagree that overtime rules need to be updated to ensure the law remains relevant for today's workforce. But we're deeply concerned about the unintended consequences of a massive increase in such a narrow implementation window which will impose serious hardships on our students, employees and institutions.

Last week, I met with leadership of the Department of Labor in a hearing. We discussed this exact issue. I talked about nonprofits and what a unique dynamic they really are. Nonprofits actually raise money based on their low administrative costs. They can tell donors: The money that you give will get directly to the individuals who need it most because our administrative overhead is low. This overtime regulation will increase their administrative overhead and will make it harder for them to raise money.

When I raised that issue to the Department of Labor, the officials of the Department of Labor told me: We understand that, so we met with the leadership of some of the nonprofit foundations around the country and told them that they should donate more to be able to cover the increased costs.

That has to be one of the most out-of-touch statements I have ever heard from someone in the Federal Government. In shock, my response was to say: Do you know how many hundreds of thousands of nonprofits are in the country? You met with a few foundations and told those foundations that they should donate more to be able to cover, when almost every church and almost every small nonprofit around the country that deals with mental health, that deals with domestic violence shelters are not tapping into big, massive foundations. They are individuals within communities that donate, and they anticipate their donations are going to help those of greatest need.

The people who work in those nonprofits are most often volunteers, but the very few numbers of individuals within the nonprofits who are paid salaries make a meager salary because they choose to--because they have a passion for the work of helping in domestic shelters or helping at a church or helping reach out to people who are in poverty or helping with a clothing shelter or a food pantry. Now you are forcing those organizations to dramatically increase salaries, which will dramatically decrease services to those in greatest need across our country.

I am astounded that the administration believes they can talk to a few people in a few foundations and just tell them: Donate more, and that will fix this. There aren't more donors to just donate more.
There are real needs in a lot of communities around the country.

Small business owners that I have spoken to of late all tell me about the complexity of this. It is not just a matter of every employee.

There is a tremendous number of exemptions as they work through the process. They want more time, and they don't like the cost increase.

They don't like what this is doing to their relationships within their businesses, and they do not like telling salaried employees: I'm sorry, you're going to have to move to hourly.

All of this headache was created by an administration that knew all of this in advance. The letters that I read earlier--those letters that were written to me I presented to the Department of Labor a year ago.

The Secretary of Labor assured me they would take those things into account. We have seen the final rule. I can assure you, they were not taken into account.

As tuition goes up in universities, this administration needs to stop complaining about the high cost of tuition in higher education because this overtime rule will directly increase the cost of tuition in every university in the country.

On the day the final rule was proposed, the first text message I received about it was from a university president who texted me and said: Don't blame me next year when tuition goes up. There is no way I can stop it now.

I responded back to him: Don't blame me for this overtime rule. This is not one we put in statute. This is one the administration created.

All of us want to see workers protected. All of us want to see things happen well in the United States. But the way this rule was implemented, the short period of time in the implementation, the size of the salary increase, and the few exemptions that are put into place have created an incredibly toxic effect for business across the country, whether it is a large business, medium business, small business, university, nonprofit--and I haven't even mentioned local government, which will be forced to raise taxes to be able to cover the cost of this. All of them are dramatically affected, and all of them are affected in a short period of time.

This is why Senator Collins and I proposed a bill that lines up with what the House has already passed to say: Delay this 6 months. Most businesses are just trying to figure out what in the world they do with this and how they handle the implementation. Delay it for 6 months.

I would say there is a tremendous amount we have to deal with on top of just the delay, but at a minimum let's delay it. There is no reason it has to go into effect right now, and it directly harms our economy in the days ahead.

These are serious issues. I hope the administration will take them seriously and understand the effect on the coming economy. I am very well aware that this administration will be out of office when most of the economic effects will be felt. But the economic effects will most certainly be felt by this economy, and the long-term effects for those individuals graduating from college right now, trying to land their first job in management, will be even tougher based on this one rule.

There is no reason to do that to the next generation of leaders. There is no reason to raise tuition in every college. There is no reason to do this rule right now. I would challenge it to be readdressed and, at a minimum, to be delayed for 6 months.

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