News Home

The Labor Department, in a move likely to be opposed by Republicans, hopes to release new standards for overtime pay for salaried workers this spring, Secretary Thomas E. Perez told House members Wednesday.

President Barack Obama instructed the department about a year ago to review the salary limit under which salaried workers must be paid overtime pay. The law was intended to prevent businesses from having to pay overtime to the highest-paid workers, but the current limit, $455 a week, was set in 2004 and is below the poverty line for a family of four, the White House said at the time.

The salary cap covered about 11 percent of salaried workers last year, far less than the 65 percent of salaried workers who were eligible for overtime pay in the 1970s, according to Rep. Mark Takano, D-Calif.

Perez said he has been in 15 or 20 meetings with stakeholders, including employers, while the department rewrites the rule. It may contain a provision that allows the threshold to be indexed to inflation, he told the House Education and the Workforce Committee during a hearing on his agency's fiscal 2016 budget.

"Our goal is to make a rule that’s fair and a rule that facilitates compliance and is simpler,” he said.

Democrats supported the proposal to change the rule. Republicans were more cautious.

Rep. Tim Walberg, R-Mich., said the department should look at things like workers’ ability to show leadership and move forward with their careers. “It’s not just the money in their cases,” he said.

Perez also called for an increase in fines for violations of worker safety and labor protection laws. The proposal is part of the administration's budget request.

“Our civil money penalties need to be modernized to reflect the reality of the 21st century. Too often our civil money penalties are the cost-of-doing-business fines,” he said. Business owners that abide by the rules want to see the law changed to ensure a level playing field, Perez added.

A change would require legislation, unlikely in a Congress in which Republicans have sought to block new regulations. Democrats have introduced bills in the past that would raise penalties and expand OSHA coverage to state and local government workers but have not yet introduced such a measure this session.

Job Corps Race

In one area of agreement with the committee’s Republicans, Perez said there needs to be more accountability in Job Corps programs.

The programs, which provide residential job training and education for young people, have come under fire for ineffectiveness. The workforce training overhaul that became law last year (PL 113-128) included new standards for issuing program operating contracts, based in large part on contractors’ past effectiveness at running a center.

Virginia Foxx, R-N.C., said she and others sent Perez a letter earlier this week voicing concerns that two-thirds of the Job Corps contracts, which last for five years, are set for selection or renewal before department regulations to meet those standards go into effect. “It’s critical that the new statutory provisions are being implemented as new contracts are being awarded,” she said.

The letter requested the department either immediately promulgate the new regulations or use bridge contracts or extensions of existing contracts until the new regulations are finished.

Perez responded that he was “flattered” that anyone thought the Labor Department’s procurement process was “moving with undue alacrity” and that he firmly believes in the new program standards. “We are making no effort to speed up contracts in an effort to avoid a new provision of [the law],” he said.

He also noted that the department had ended a contract with a poorly performing group in late February. “When there is chronic underperformance, we will not hesitate to take action,” he said, adding that the department may issue further recommendations for changes to the law to deal with consistently underperforming programs.

http://www.cq.com/doc/news-4645349?5&search=5oIk07pR