News Home

Republican lawmakers inclined to be skeptical of the Obama administration's agenda warned Labor Secretary Thomas E. Perez that they are watching his department closely as it formulates rules and regulations regarding overtime pay, retirement advice and workforce development.

“I would strongly encourage you to take a step back and build bipartisan consensus,” Chairman John Kline, R-Minn., told Perez during a hearing of the House Education and Workforce Committee on the department's priorities. “The department’s my-way-or-the-highway approach will not deliver the lasting, positive change working families and job creators need to move this country forward.”

Republican lawmakers pressed Perez on a proposed fiduciary rule that would expand the types of retirement investment advice covered by regulations. The measure, Perez said, is a result of changing times where more individuals are now in control of managing their retirement funds. 

But the regulations could increase the cost of doing business with financial advisers, effectively pricing out lower- and middle-income workers looking for help with their retirement, said Rep. Phil Roe, R-Tenn. “I don’t think your intention is to decrease the financial advice low-income investors get, but there are some facts out there we can’t ignore now,” he said.

Rep. Matt Salmon, R-Ariz., said there were widespread concerns among his constituents about the suggested change. 

“I’ve never had a proposed rule that has sparked a constituent outcry more than the proposed rule on the fiduciary rule,” Salmon said, “And it’s a bipartisan response.”

The final text of the proposed fiduciary rule will become public after a review by the White House Office of Management and Budget.

Rep. Virginia Foxx, R-N.C., criticized how long the department had taken to finalize regulations for the Workforce Innovation and Opportunity Act (PL 113-128), which  revamped job training and employment services systems and was signed into law in July 2014. Perez said the last remaining regulations should be finalized by June and noted the core regulations to carry out the law have been in place since July of last year.

“The majority of the WIOA is in place. What remains is the accountability mechanisms,” Perez said, adding that the department issued guidance for state plans and communicates with states weekly to ensure their plans comply with the federal rules.

That, Foxx replied, means the department is leaving Congress out of the process.

“The de facto issue of final regulation through the approval of state plans circumvents this progress by making the rules effective before providing Congress with the opportunity to review them,” she said.

Lawmakers also raised red flags about the department's proposed overtime rule, which the department estimates would extend overtime protections to nearly 5 million white collar workers. Under the rule, proposed in June, overtime protection and pay would be given to individuals who make up to $47,892, slightly more than double the current level of $23,660.

While Perez said the regulation aims to give a day’s pay for a day’s work, Rep. Tim Walberg, R-Mich., painted the issue as more complex. Workers exempted from overtime usually have more flexibility in their schedules as they’re not being monitored by the hour. They can stay later during busy times and leave sooner on slow days, he said.

“I’m not concerned we would increase the overtime. They probably need it,” Walberg said. “But $50,000 causes me concern.” He suggested $36,000 might be a more acceptable amount.

Perez said that hourly status was not a requirement of the new law and there were a number of ways to be salaried and work overtime.

Like the fiduciary rule, the overtime rule is under review at the OMB.  

http://www.cq.com/doc/news-4853790?7