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95–577 2016

EXAMINING THE COSTS AND CONSEQUENCES OF 

THE ADMINISTRATION’S OVERTIME PROPOSAL 

HEARING 

BEFORE THE

SUBCOMMITTEE ON WORKFORCE PROTECTIONS 

COMMITTEE ON EDUCATION 

AND THE WORKFORCE 

U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

HEARING HELD IN WASHINGTON, DC, JULY 23, 2015 

Serial No. 114–23 

Printed for the use of the Committee on Education and the Workforce 

( 

Available via the World Wide Web: www.gpo.gov/fdsys/browse/ 

committee.action?chamber=house&committee=education 

or 

Committee address: http://edworkforce.house.gov 


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COMMITTEE ON EDUCATION AND THE WORKFORCE 

JOHN KLINE, Minnesota, Chairman 

Joe Wilson, South Carolina 

Virginia Foxx, North Carolina 

Duncan Hunter, California 

David P. Roe, Tennessee 

Glenn Thompson, Pennsylvania 

Tim Walberg, Michigan 

Matt Salmon, Arizona 

Brett Guthrie, Kentucky 

Todd Rokita, Indiana 

Lou Barletta, Pennsylvania 

Joseph J. Heck, Nevada 

Luke Messer, Indiana 

Bradley Byrne, Alabama 

David Brat, Virginia 

Buddy Carter, Georgia 

Michael D. Bishop, Michigan 

Glenn Grothman, Wisconsin 

Steve Russell, Oklahoma 

Carlos Curbelo, Florida 

Elise Stefanik, New York 

Rick Allen, Georgia 

Robert C. ‘‘Bobby’’ Scott, Virginia 

Ranking Member 

Rube ́n Hinojosa, Texas 

Susan A. Davis, California 

Rau ́l M. Grijalva, Arizona 

Joe Courtney, Connecticut 

Marcia L. Fudge, Ohio 

Jared Polis, Colorado 

Gregorio Kilili Camacho Sablan, 

Northern Mariana Islands 

Frederica S. Wilson, Florida 

Suzanne Bonamici, Oregon 

Mark Pocan, Wisconsin 

Mark Takano, California 

Hakeem S. Jeffries, New York 

Katherine M. Clark, Massachusetts 

Alma S. Adams, North Carolina 

Mark DeSaulnier, California 

Juliane Sullivan, Staff Director 

Denise Forte, Minority Staff Director 

SUBCOMMITTEE ON WORKFORCE PROTECTIONS 

TIM WALBERG, Michigan, Chairman 

Duncan Hunter, California 

Glenn Thompson, Pennsylvania 

Todd Rokita, Indiana 

Dave Brat, Virginia 

Michael D. Bishop, Michigan 

Steve Russell, Oklahoma 

Elise Stefanik, New York 

Frederica S. Wilson, Florida 

Ranking Member 

Mark Pocan, Wisconsin 

Katherine M. Clark, Massachusetts 

Alma S. Adams, North Carolina 

Mark DeSaulnier, California 

Marcia L. Fudge, Ohio 


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C O N T E N T S 

Page 

Hearing held on July 23, 2015 ............................................................................... 1 

Statement of Members: 

Walberg, Hon. Tim, Chairman, Subcommittee on Workforce Protections ... 1 

Prepared statement of ............................................................................... 4 

Wilson, Hon. Frederica S., Ranking Member, Subcommittee on Workforce 

Protections ..................................................................................................... 6 

Prepared statement of ............................................................................... 8 

Statement of Witnesses: 

Eisenbrey, Mr. Ross, Vice President, Economic Policy Institute, Washington, D.C. ................................................................................................... 29 

Prepared statement of ............................................................................... 31 

Hays, Ms. Elizabeth, Director of Human Resources, MHY Family Services, Mars, PA ............................................................................................... 11 

Prepared statement of ............................................................................... 13 

McCutchen, Hon. Tammy, Principal, Littler Mendelson P.C., Washington, 

D.C. ................................................................................................................ 48 

Prepared statement of ............................................................................... 51 

Williams, Mr. Eric, Chief Operating Officer, CKE Restaurant Holdings, 

Inc., Carpinteria, CA .................................................................................... 21 

Prepared statement of ............................................................................... 24 

Additional Submissions: 

Chairman Walberg: 

Letter dated July 23, 2015, from the American Hotel & Lodging Association ................................................................................................................. 106 

Prepared statement of the American Network of Community Options 

and Resources (ANCOR) .............................................................................. 109 

Letter dated July 22, 2015, from HR Policy Association .............................. 111 

Letter dated August 3, 2015, from Meridian Health Plan ............................ 130 

Letter dated July 22, 2015, from the National Association of Home Builders ................................................................................................................... 134 

Letter dated July 22, 2015, from the National Retail Federation ................ 141 

Letter dated July 23, 2015, from the Partnership to Protect Workplace 

Opportunity ................................................................................................... 144 

Letter dated July 23, 2015, from WorldatWork ............................................. 149 

Ms. Wilson: 

Letter dated July 22, 2015, from the Center for American Progress ........... 90 

Letter dated July 20, 2015, from the Center for Economic and Policy 

Research CEPR ............................................................................................. 93 

Letter dated July 23, 2015, from the National Employment Law Project ... 95 

Letter dated July 23 2015, from the National Partnership for Women 

and Families .................................................................................................. 98 

Letter dated July 22, 2015, from the United Steelworkers USW ................ 100 

Letter dated July 22, 2015, from the 9to5, National Association of Working Women ..................................................................................................... 102 


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EXAMINING THE COSTS AND CONSEQUENCES 

OF THE ADMINISTRATION’S OVERTIME PROPOSAL 

Thursday, July 23, 2015 

U.S. House of Representatives 

Subcommittee on Workforce Protections 

Committee on Education and the Workforce 

Washington, D.C. 

The subcommittee met, pursuant to call, at 10:03 a.m., in Room 

2175, Rayburn House Office Building, Hon. Tim Walberg (Chairman of the subcommittee) presiding. 

Present: Representatives Walberg, Thompson, Rokita, Brat, 

Bishop, Russell, Stefanik, Wilson, Pocan, Clark, Adams, 

DeSaulnier, and Fudge. 

Also present: Representatives Kline, Scott, Jeffries, Courtney, 

Takano, and Bonamici. 

Staff present: Janelle Belland, Coalitions and Members Services 

Coordinator; Ed Gilroy, Director of Workforce Policy; Callie Harman, Staff Assistant; Tyler Hernandez, Press Secretary; Nancy 

Locke, Chief Clerk; John Martin, Professional Staff Member; 

Zachary McHenry, Legislative Assistant; Brian Newell, Communications Director; Krisann Pearce, General Counsel; Lauren 

Reddington, Deputy Press Secretary; Molly McLaughlin Salmi, 

Deputy Director of Workforce Policy; Alissa Strawcutter, Deputy 

Clerk; Alexa Turner, Legislative Assistant; Joseph Wheeler, Professional Staff Member; Tylease Alli, Minority Clerk/Intern and Fellow Coordinator; Austin Barbera, Minority Staff Assistant; Denise 

Forte, Minority Staff Director; Christine Godinez, Minority Staff 

Assistant; Brian Kennedy, Minority General Counsel; Kevin 

McDermott, Minority Senior Labor Policy Advisor; Amy Peake, Minority Labor Policy Advisor; Veronique Pluviose, Minority Civil 

Rights Counsel; Arika Trim, Minority Press Secretary; and Elizabeth Watson, Minority Director of Labor Policy. 

Chairman WALBERG. A quorum being present, the subcommittee 

will come to order. 

Good morning to each of you, and welcome, to all of our guests 

this morning. 

I would like to thank our witnesses for joining us today to discuss the costs and consequences of the administration’s overtime 

proposal. 


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Just over a month ago this subcommittee convened to discuss the 

need to modernize the confusing and outdated regulations implementing federal wage and hour standards. At the time, the administration had not yet released its overtime proposal, but several of 

our witnesses were already worried about what the proposal would 

look like and the consequences for workers and job creators. 

Recognizing this administration’s propensity for executive overreach, I shared many of those same concerns. But I was still hopeful that somehow this time might be different—that somehow the 

administration would listen to all of the concerns, consider all of 

the data, and put forward a proposal that would help do some good 

without doing any harm. As it turns out, the optimism was misguided, much like the rule the administration eventually proposed. 

In the weeks since the administration unveiled its overtime proposal, even more concerns have been raised about the impact it 

would have on both employees and employers. Various studies and 

analyses have shown the administration’s plan would result in billions of new costs for employers annually—a reality that is tough 

for many employers in this economy, but even tougher on small 

businesses and nonprofits. 

Unfortunately, the proposal’s anticipated consequences extend 

far beyond added costs and could have much more serious implications for many Americans. 

Of all the concerns we have heard about this proposal, the ones 

I find most alarming are those that will limit flexibility and opportunity in the workplace. As employers struggle to cope with the 

added costs of these new overtime rules, many salaried employees 

will be demoted—demoted—to hourly workers with lower pay and 

stricter schedules. 

With that shift comes fewer opportunities for on-the-job training, 

talent development, and managerial experience, all of which leads 

to fewer opportunities to advance up the economic ladder. And isn’t 

that what America is about? 

One of the most inspiring things about the American workforce 

is that a crew member at a fast-food restaurant can work hard, 

earn a spot in management, and eventually go on to become a leader at a major U.S. business. That is the American dream—one that 

all policymakers should work to encourage, not stifle. 

I am sure Mr. Williams will have more to say on that topic. Unfortunately, if the administration’s proposal has the effect many 

anticipate it will, stories like that of Mr. Williams will be harder 

to come by. 

Inasmuch as the administration’s proposal is flawed for what it 

would do, it is equally disappointing in what it doesn’t do. It 

doesn’t address the complexity of current regulations, and it doesn’t 

reduce unnecessary litigation. 

As Chairman Kline and I said when the proposal was first unveiled, it is a missed opportunity. 

What we need instead, and what the American people deserve, 

is a balanced approach that will strengthen employee safeguards, 

eliminate employer confusion and uncertainty, and encourage 

growth and prosperity for those working hard to make a living. 

From what we have heard so far, the administration’s proposal is 

not that approach. 


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This Committee has held numerous hearings and explored various efforts over the years to improve the rules and regulations 

guiding federal wage and hour standards. We have heard from employees and employers alike that the current system is too complex, 

burdensome, and outdated. And we have seen studies that show related litigation is on the rise. 

For all these reasons, we will continue to urge the administration 

to improve these rules and regulations responsibly and in a way 

that doesn’t destroy opportunities for hardworking Americans. 

I look forward to hearing from our witnesses today to better understand the effects this proposal could have on our workforce. 

And so, with that, I will now recognize the senior Democratic 

member of the subcommittee, Representative Frederica Wilson, for 

her opening remarks. 

[The statement of Chairman Walberg follows:] 


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Ms. WILSON of Florida. Chairman Walberg, thank you for holding 

this hearing today and giving us the opportunity to talk about the 

Department of Labor’s proposed overtime rule. 

As a prelude to the passage of the Fair Labor Standards Act, 

President Roosevelt made a powerful declaration: All Americans 

deserve a fair day’s pay for a fair day’s work. 

This simple, powerful principle is the foundation of the historic 

labor law that we, as members of Workforce Protections Subcommittee, are charged with strengthening and defending. We 

must protect the workforce. 

Implicit in this principle is the freedom from excessive work 

hours. Explicit in FLSA is premium pay for overtime work. 

Overtime pay was established to protect workers from the excessive hours that endanger their health and well-being, prevent them 

from spending time with their families, and prohibit them from 

taking the necessary time to recover from the stresses of work, 

which we all need to do. 

Unfortunately, the failure to update the overtime salary threshold to reflect the economic realities of today has seriously eroded 

FLSA’s protection against excessive hours and its explicit promise 

of a fair day’s pay for a fair day’s work. 

Forty years ago, nearly two-thirds of the workforce was eligible 

for overtime protections. Today, only 8 percent of workers are eligible for overtime protections. 

We cannot possibly argue that these current working conditions 

for millions of Americans are fair. 

It is not fair that the men and women teetering on the brink of poverty—people making $23,660 a year—are asked to work 50, 60, 

or 70 hours a week with no promise of extra pay. It is not fair that 

millions of mothers and fathers who are forced to work long hours 

each week find it almost impossible to give their children the time 

and attention they deserve, yet are still deprived of the overtime 

pay that could lend to the economic security of their families. 

It is not fair that a worker eager to advance her career can be 

enticed by the promise of a promotion, a salaried position with the 

management title, yet be met with astonishingly similar work duties, shockingly greater hours, and in the end, pitifully smaller pay. 

The Department of Labor’s proposed rule promises to restore a 

fair day’s pay for a fair day’s work. The proposed rule would raise 

the salary threshold from the current $23,660 a year to about 

$50,440 a year, extending overtime protections to almost five million Americans. 

The rule also ensures that the salary threshold automatically increases to keep pace with future shifts in average earnings. 

These strengthened overtime protections would mean so much in 

the daily lives of millions of Americans. This overtime rule would 

allow more parents to be involved in their children’s lives—something we know is absolutely critical for the development and betterment of our children. 

This overtime rule would encourage employees to hire more 

workers instead of overworking a few, meaning more jobs for more 

Americans. Jobs, jobs, jobs. 

The overtime rule would give part-time workers access to more 

hours that would help them earn more money. 


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I stand strong with Chairman Scott and my colleagues on this 

Committee in support of this overtime rule. I stand strong with the 

more than 150 House and Senate Democrats who sent a letter to 

President Obama this week to express our strong support of this 

overtime rule. 

I want to thank the witnesses for being here today and look forward to hearing about how this proposed rule strengthens overtime 

protections and renews the promise of a fair day’s pay for a fair 

day’s work. 

And I need to correct that: I stand strong with my Ranking Member and colleague, Mr. Scott. 

Thank you. 

[The statement of Ms. Wilson of Florida follows:] 


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Chairman WALBERG. I thank the gentlelady. 

Pursuant to committee rule 7(c), all subcommittee members will 

be permitted to submit written statements to be included in the 

permanent hearing record. And without objection, the hearing 

record will remain open for 14 days to allow statements, questions 

for the record, and other extraneous material referenced during the 

hearing to be submitted in the official hearing record. 

It is now my pleasure to introduce today’s witnesses. 

First, Ms. Elizabeth Hays is the director of human resources at 

MHY Family Services in Mars, Pennsylvania. In her role as director of human resources, she is responsible for overseeing all H.R. 

operations and regulatory areas, including those associated with 

benefits, administration, employee relations, health and safety, and 

policy administration. 

Welcome. 

Mr. Eric Williams is the chief operating officer at CKE Restaurants, Incorporated, in Carpinteria—Carpinteria, that’s better— 

California. Mr. Williams was named COO of CKE restaurants in 

June 2015. Having previously served as executive vice president of 

operations for Carl’s Jr., Mr. Williams began his career as a 

Hardee’s crew member in 1983, advancing through the ranks with 

management positions in both the company and franchise operations and training. 

Welcome. Go blue. 

Mr. Ross Eisenbrey is vice president at Economic Policy Institute 

here in Washington, D.C. Prior to joining EPI, he worked as a staff 

attorney and legislative director in the House of Representatives 

and as a committee counsel in the Senate. Mr. Eisenbrey also 

served as policy director of the Occupational Safety and Health Administration from 1999 to 2001 and is a former commissioner of the 

Occupational Safety and Health Review Commission and a graduate of University of Michigan Graduate School. 

Welcome. 

The Honorable Tammy D. McCutchen is a principal with Littler 

Mendelson P.C. in Washington, D.C. She represents management 

clients in connection with all types of labor and employment matters but focuses her practice on complying with the FLSA and state 

wage and hour laws, conducting audits of overtime exemption classifications, implementing compliance programs designed to avoid 

wage and hour disputes, and representing employers being investigated by DOL’s Wage and Hour Division. Prior to her work at Littler, Ms. McCutchen served as the administrator of the Wage and 

Hour Division at the Department of Labor from 2001 to 2004. 

Welcome. 

I will now ask our witnesses, as is the custom in this Committee, 

to stand and raise your right hand. 

[Witnesses sworn.] 

You may be seated. 

Let the record reflect the witnesses answered in the affirmative, 

and we look forward to your testimonies. 

Before I recognize you to provide those testimonies, let me briefly 

remind you of the lighting system. Like the traffic lights, green is 

go for your five minutes of testimony; yellow, caution, get ready to 

stop, start slowing down; red, find a way to conclude as briefly as 


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possible. We want to hear your testimonies and we want to make 

sure we also have opportunities for questioning. 

And then as our Committee Chairman is known to say, we will 

be a little bit more firm with our Committee members—right, Mr. 

Chairman?—to keep ourselves at the five-minute questioning 

timeline, as well. 

And so, having said that, I now recognize Ms. Hays for your 

opening five minutes of testimony. 

TESTIMONY OF MS. ELIZABETH HAYS, DIRECTOR OF HUMAN 

RESOURCES, MHY FAMILY SERVICES, MARS, PENNSYLVANIA 

(TESTIFYING ON BEHALF OF THE SOCIETY FOR HUMAN RESOURCE MANAGEMENT) 

Ms. HAYS. Chairman Walberg, Ranking Member Wilson, and distinguished members of the subcommittee, my name is Elizabeth 

Hays and I am the human resources director at MHY Family Services in Mars, Pennsylvania. I have been in this role overseeing H.R. 

operational and regulatory issues since 2007. I appear before you 

today on behalf of the Society for Human Resource Management, 

or SHRM. 

Thank you for the opportunity to testify today about how these 

proposed changes will impact not only my organization, but other 

employers. 

Mr. Chairman, quite literally these proposed overtime regulations to more than double the salary threshold presents the risk of 

my organization closing its doors. As a nonprofit with tight costs, 

we are often unable to provide pay increases and hire additional 

employees. 

Worst case scenario, I estimate that these changes could result 

in additional and unfunded costs of more than three-quarters of a 

million dollars. To be clear, this would be a 9.1 percent unfunded 

increase to our budget. 

Allow me to tell you a little bit about my organization. MHY is 

a nonprofit organization serving youth and families by providing 

support and services that afford opportunities for a better life. 

MHY offers comprehensive residential, educational, and community-based services, responding to an array of hardships and traumas, including mental illness, behavioral issues, abuse, and neglect. 

Let me highlight some specific challenges my organization would 

face if these proposed overtime regulations are implemented. To be 

clear, most of MHY’s exempt employees—managers and professionals—are currently paid less than $50,000 and under the administration’s proposal would become eligible for overtime. 

As an underfunded nonprofit with limited flexibility in a budget, 

I have serious concerns about how we will cover potential overtime 

expenses while still providing high-quality services for the at-risk 

youth served by MHY. Our nonprofit’s ability to provide critical 

services to the youth and families that we serve will be negatively 

impacted. 

At MHY we prioritize a continuity of care model that ensures 

that the at-risk youth receive services and care from the same 

therapists and supervisors. Therapeutic services are driven by the 


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relationships that our employees have with the youth and families 

to which they are assigned. 

Months and sometimes years go into building that trust and 

bond, and this can’t be replicated by swapping in another professional to avoid exceeding 40 hours on the part of a primary professional. Under this overtime proposal, continuity of care would be 

undermined by limiting the ability of our employees to effectively 

respond to clients’ clinical needs. 

Changes to the overtime regulations will likely require employers 

to reclassify a significant number of salaried employees to hourly 

employees. Hourly employees, of course, are paid only for the hours 

that they work and often are forced to closely track their hours to 

ensure compliance with overtime requirements. This can lead to 

less workplace flexibility. 

At MHY our residential program managers, as an example, are 

provided with workplace flexibility options. If I had to reclassify 

these positions they would lose their ability to leave early on 

calmer work days to watch their children’s soccer game or take a 

Friday off for a long weekend, which they are currently afforded to 

offset long work hours on other days. 

Let me turn to some of SHRM’s concerns with the proposed overtime rule at this point. SHRM appreciates the administration’s interest in modernizing the FLSA overtime regulations and agrees 

that a measured salary threshold update is, in fact, warranted. 

However, more than doubling the salary threshold to the 40th percentile of weekly earnings presents challenges for employers like 

mine, whose salaries tend to be lower. 

The proposed increase to the 40th percentile sharply contrasts 

with historical updates to the salary threshold that represented 

more reasonable increases. Those increases acknowledged pay differences across sectors and in certain areas with lower costs of living. 

SHRM remains concerned that the Department of Labor may 

still make changes to the duties test that would further exacerbate 

an already complicated set of regulations for employers. Further 

changes to the primary duties test, including a required quantification of exempt time or the elimination of managers’ ability to perform both exempt and nonexempt work concurrently, would create 

significant challenges for employers and employees. 

Should the DOL ultimately suggest changes to the duties test, 

SHRM believes a full comment period would be warranted. 

In closing, I can’t overstate how concerned I am with these proposed changes on my organization’s ability to fulfill its mission to 

serve the youth and families in Pennsylvania. In addition, I share 

SHRM’s concerns that changes to the FLSA overtime regulations 

will disproportionately impact nonprofit organizations like MHY, 

employers in low-cost-of-living areas, and employers in certain industries. 

Mr. Chairman, thank you again for allowing me to share my experiences and SHRM’s views on the FLSA overtime regulations. I 

welcome your questions. 

[The testimony of Ms. Hays follows:] 


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Chairman WALBERG. Thank you. 

I now recognize Mr. Williams for your five minutes of testimony. 

TESTIMONY OF MR. ERIC WILLIAMS, CHIEF OPERATING OFFICER, CKE RESTAURANT HOLDINGS, INC., CARPINTERIA, 

CALIFORNIA 

Mr. WILLIAMS. Chairman Walberg, Ranking Member Wilson, and 

members of the subcommittee, thank you for the opportunity to testify today on the impact of the administration’s proposed overtime 

regulations. My name is Eric Williams and I serve as chief operating officer at CKE Restaurants, the parent company of Carl’s Jr. 

and Hardee’s restaurant chains. I also own and operate seven 

Hardee’s franchise restaurants in and around Indianapolis, Indiana. 

CKE and its franchisees account for 75,000 jobs within the 

United States of America. Our employees are our greatest asset 

and are highly valued. 

As in my personal experience, our employees in our company can 

progress through our management ranks as high as their ambition 

may take them. Through hard work, determination, and the opportunities available in the quick-service restaurant industry, I have 

been able to enjoy a long and fruitful career. 

The experience I received was very valuable. My hard work was 

rewarded with increased responsibility, greater pay, and opportunities to advance for a job well done. 

My career development was initially a slow process. I was promoted from crew to an hourly management position limited to 40 

hours per week. Once I reached our weekly maximum, I was not 

allowed to work additional hours. I would have gladly traded the 

overtime premium to gain more experience and knowledge about 

the business. 

Shortly, I worked my way up to restaurant manager, where I 

was able to work a schedule that was most beneficial to the business and take off during the times that my supervision wasn’t as 

needed. For example, local conventions provided significant business opportunities with significantly higher customer demands. 

Conversely, there were also a number of times when business 

was slow. During this time I was able to spend additional time 

with my family, raise my three daughters, attend school functions, 

work with my church, and take vacations. As a salaried manager 

at a time-demanding location, I was able to earn a good living and 

still enjoy a good quality of life. 

Over time my career accelerated and I gained greater opportunities. During my time in middle management I witnessed workers 

follow the same path to advancement that I followed, many of 

whom are still with our company today. Like myself, they have advanced in their careers and saved for the future by taking advantage of a model that encourages and rewards hard work. 

As I noted a moment ago, aside from now serving as CKE’s COO, 

I currently own and operate seven Hardee’s restaurants in Indianapolis. My restaurants create jobs for 160 people who live primarily 

in low-income urban areas. 

I offer entry-level management programs similar to the ones 

which provided me with the opportunities I had to advance within 


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our company over the last 30 years. Without these programs and 

the labor guidelines that allowed for them, many talented young 

adults will be stuck in jobs focused on time spent on the clock rather than time well-spent. They will not have the same opportunities 

I had because businesses just can’t afford it. 

It will be both lucrative and fulfilling to the employees willing to 

invest the time and energy to move from hourly wage crew-level 

positions to salaried management positions with performance-based 

incentives. However, the Department of Labor’s proposal replaces 

a general manager’s incentive to get results with an incentive to 

clock more hours. 

The salaries of four of my 10 managers would be impacted by the 

proposal’s change to the department’s regulations. These four managers earn about $45,000 a year. Keep in mind that these salaries 

are competitive, particularly recognizing the regional economic differences across the country, and these managers are eligible for the 

previously mentioned performance bonuses and also receive generous fringe benefits. 

To comply with the department’s proposal, these restaurants 

would take an estimated 6 percent reduction to the already thin 

margins that exist in the restaurant industry. The additional overtime cost is likely to negatively impact the rest of our hardworking 

workforce by reducing hours, reducing salaries, or reducing bonuses, and equity incentives. 

I would be forced to eliminate three salaried assistant manager 

positions and put them back on the clock. I can assure you that a 

demotion is the last thing these employees want, since it would 

block their career path to general manager. I would be forced to 

limit their hours to 40 hours per week and to schedule them on the 

busier shifts, which would allow for little development to grow 

their careers. 

As for CKE-owned restaurants, under the new rule we would 

need to rethink how we staff and schedule our management employees. Overtime pay is a penalty employers pay for requiring employees to work extended hours. It does not increase productivity, 

nor does it increase revenue. It simply requires employers to pay 

time-and-a-half for routine work, which reduces earnings. 

This is why we manage overtime very closely. Rather than staff 

our restaurants with salaried managers with performance-based 

bonuses who can earn higher pay, we would be forced to operate 

the business with fewer managers who would be paid less, due to 

a reduction in hours and bonus, and who would be limited to a 40- 

hour work week. 

Unfortunately, operating with fewer management positions 

would limit the advancement of crew employees into these positions and stifle their personal growth. 

As a personal example, I was promoted from a crew position to 

a management position because there was a position available, and 

this opened many doors for me. Reducing the availability of those 

positions because they are too expensive hurts the very people we 

are attempting to help. 

Should the rule prevail, it is highly doubtful that we would expand our staffing much beyond current levels, primarily due to the 

rising cost of recruiting, training, and providing benefits to new 


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employees. We would first look for ways to increase the existing 

employee productivity at the current wage, eliminate nonessential 

tasks altogether, and use technology to reduce hourly positions. 

While we may find the need to increase our minimum staffing 

levels to maintain high levels of guest service, we would primarily 

utilize part-time employees for limited shifts during the busiest 

hours of our operations. It should be clear that the biggest costs 

will be to all the talented people who, like me, could have advanced 

from cook to COO or franchise owner. 

Finally, I have heard that people are concerned that to avoid 

paying overtime employers are calling employees managers who 

are just stocking shelves. However, in reality, stocking shelves or 

engaging in similar activities won’t make you a manager and won’t 

exempt you from the overtime requirements under federal law. 

Managers may well help their employees stock shelves or perform other physical work while performing their primary duty as 

a manager, which is hardly something to disdain. Each manager is 

entitled to decide whether to perform such tasks, such as the small 

business owners may decide to perform non-managerial physical 

work to increase their profits or to show the crew that they, too, 

can perform these tasks. As anyone who has run a business knows, 

that is what effective owners and managers do. 

Mr. Chairman, Ms. Wilson, subcommittee members, thank you, 

and I am happy to answer any questions. 

[The testimony of Mr. Williams follows:] 


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Chairman WALBERG. Thank you. 

Mr. Eisenbrey, I recognize you for your five minutes. 

TESTIMONY OF MR. ROSS EISENBREY, VICE PRESIDENT, 

ECONOMIC POLICY INSTITUTE, WASHINGTON, D.C. 

Mr. EISENBREY. Thank you, Mr. Chairman, and members of the 

Committee. I will make five points and then I will elaborate on 

them. 

First, America’s middle class has suffered through decades of 

wage stagnation and rising inequality that can’t be corrected without changes in a range of federal policies that have worked against 

them. 

Two, the department’s higher salary threshold for exemption 

from overtime will help. It is long overdue and millions of struggling middle-class workers will benefit from closing this loophole, 

which lets employers work them long hours without pay. 

Three, the rule will raise wages for some employees, reduce excessive work hours for others, and create hundreds of thousands of 

jobs. No one paid less than $50,000 a year should work more than 

40 hours a week without being paid for it. 

For the overtime law to be effective, the salary threshold for exemption must be indexed so it increases automatically without political intervention. Automatic indexing is well within the Department of Labor’s authority. 

Many employers, unfortunately, have gotten used to a system 

that lets them work people long hours without paying them for it. 

But that is exactly what the FLSA was intended to prevent. 

Employers will adjust to this rule, as they did to the original 

Fair Labor Standards Act and every improvement in the law and 

the regulations since then. What seems like a big increase in the 

salary threshold is simply the result of employers having gotten 

used to a loophole in the law for far too long. 

So number one, from 1979 to 2013 inflation-adjusted wages in 

the United States rose only 15.2 percent for the bottom 90 percent—less than 0.5 percent per year—while wages for the top 1 

percent increased 137 percent. The economy and total national income grew, but most Americans were left out. 

Tax policy encouraged CEOs and top executives to grab an oversized share of income, and they have. CEO pay for the 350 largest 

corporations grew 1,000 percent since 1978, while the pay of average workers increased only 11 percent. 

Corporations have relentlessly squeezed labor costs at the expense of average workers, increasing profits and benefiting shareholders and executives with stock options. Corporate profits are at 

all-time highs while tens of millions of workers struggle to get by. 

The decades-long push to cut labor costs has gone too far and the 

economy is out of balance. Too many families have too little income 

because their wages have been held down. They can’t spend what 

they aren’t paid, and they can’t be the consumers that businesses 

need. 

It isn’t inevitable economic forces but, rather, federal policies 

that have reduced employee bargaining power, encouraged excessive executive compensation, worsened inequality, lowered labor 


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standards, and offshored jobs. Those policies should all be reversed. 

Overtime reform is one part of this solution. 

Number two, the current salary threshold—the level above which 

employers can refuse to pay for overtime work—is less than the 

poverty line for a family of four and doesn’t begin to reflect the status and financial reward that characterize true executives, administrators, or professionals, the small group that Congress originally 

meant to exempt. None of your constituents thinks an employee 

paid $24,000 a year is a bona fide executive. The current rule is 

indefensible. 

The regulatory changes in 2004 did double harm. They inappropriately expanded the exemptions and set the salary threshold at 

a level so low as to be a joke. 

In 1979 the salary threshold covered and protected about 12 million employees. Today it protects only 3.5 million even though U.S. 

employment is 50 percent greater today. 

Number three, on job creation: Goldman Sachs, EPI, the National Retail Federation, and the Department of Labor all agree the 

rule will create more than 120,000 jobs, provide wage increases for 

some employees, and reduce excessive work hours for others. Those 

jobs are needed. Millions of Americans are unemployed, and experience here and abroad tells us that the affected employees and their 

families will be better off. 

Number four, to prevent the kind of neglect that led to a 29-year 

decline in the real value of the threshold for exemption followed by 

another 11-year decline, it has to be indexed, preferably to the 

growth in compensation of salaried employees. The Department 

has for decades failed to carry out its statutory mandate to update 

the rules in a timely way, and indexing is the only way to prevent 

that kind of failure in the future. Nothing in the Fair Labor Standards Act or any subsequent enactment limits the epartment’s authority to index the salary level. 

Finally, five, some employers have made it their business model 

to work salaried employees not 40 hours a week but 60 to 90 hours 

a week while paying them salaries too low to meet a basic family 

budget. I have talked to and written to them, and I have seen 

scores of stories in the comments we collected on the rule, including the stories of employees worked literally until they dropped 

from injury or disability. 

Fran Rodgers, who for many years had a hugely successful consulting business that worked with corporations on improving worklife balance, put it well in a New York Times op-ed: Employers, like 

all of us, tend to be careless with and waste what they don’t have 

to pay for, including the precious time of their time-stressed employees. 

The rule will make employers less careless and more efficient by 

making them pay for overtime. They will adapt. What seems like 

a big increase in the salary threshold is simply the result of employers having gotten a free ride for too long. 

[The testimony of Mr. Eisenbrey follows:] 


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Chairman WALBERG. Thank you. 

I now recognize the Honorable Tammy McCutchen for your five 

minutes of testimony. 

TESTIMONY OF HON. TAMMY MCCUTCHEN, PRINCIPAL, LITTLER MENDELSON P.C., WASHINGTON, D.C. (TESTIFYING ON 

BEHALF OF THE U.S. CHAMBER OF COMMERCE)

Ms. MCCUTCHEN. Thank you, Mr. Chairman. I would like to 

spend my time today talking about the salary level, based on my 

experience of being at the Department of Labor during the last set 

of changes to these regulations in 2004. 

Since the early 1940s the DOL has consistently stated that the 

purpose of setting the minimum salary threshold for these exemptions is to provide a ready method of screening out the obviously 

nonexempt employees. This is not a minimum wage for exempt employees. In fact, exempt employees are exempt from the minimum 

wage and the overtime requirements. DOL’s proposal of a $50,000 salary level does the opposite of 

screening out the obviously nonexempt, and instead excludes from 

the exemption many employees that are obviously performing exempt duties and, in fact, many, many hundreds and thousands of 

employees that the DOL itself and federal courts have found perform exempt duties. 

I want to be clear, there is no—at the U.S. Chamber of Commerce, who I am representing today, there is no one in the business who is claiming that it is not time for a salary increase. From 

1938, when the FLSA was passed, to 1975, the salary level was increased every five to nine years. It has now been 11 years since the 

last increase in 2004. 

So it is time for a change. The question is, how high? And the 

Department of Labor’s proposal of using the 40th percentile of all 

salaried earners to get to that $50,000 is just unprecedented in the 

regulatory history in the 77 years of the FLSA. 

In 1948—1958—in setting the salary level, DOL looked at the 

10th percentile of employees and the salaries earned by exempt 

employees in lower-wage businesses, lower-wage geographic areas, 

and in small businesses. In 2004 we adopted that 1958 methodology, doubled it, and we looked at the bottom 20th percentile of 

salaried earners in the South and in retail, where wages and cost 

of living are lower. 

The Department of Labor proposes to set the salary level at the 

40th percentile, but not looking only at rural areas, small businesses, and lower-profit margin businesses. They are using a data 

set that includes all salaried employees. It also includes doctors, 

lawyers, sales employees, and federal employees, who all, of course, 

earn a lot more than most exempt employees and, by the way, are 

not even subject to the salary level tests in the regulations. 

This $50,000 level—the—I guess the best way to demonstrate 

how high it really is, is that it is actually higher than the salary 

levels that are required for exemption under New York law and 

California law. Just like the minimum wage, states have their own 

exemptions from overtime and can set their own salary levels. 

In New York that salary level is around $34,000 a year. And in 

California, employees who are earning more than $37,000 a year 


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can be classified as exempt from overtime. That number is going 

to be going up to $41,000 in 2016. 

So the Department of Labor’s proposal is $10,000, $15,000 higher 

than the minimum salary level for exemption in New York and 

California, arguably the two highest cost-of-living states and higher-salary states. This is like applying the San Francisco $12.25 

minimum wage in Biloxi, Mississippi. It just won’t work and will 

have a disproportionate impact on economies in our rural areas, 

and particularly in the South and in the Midwest. 

If you go back through the historical salary levels from 1938 to 

the present and correct those numbers for inflation, also the 

$50,000 level is simply not supported. I actually used the BLS inflation calculator to create the chart that is in my written testimony, and what that shows is that if you correct for inflation all 

the salary levels under all tests on the entire 77-year history, the 

average is about $42,000. 

So $50,000 is at least $10,000 higher than any possible justification that you could have. 

Before my time expires I also want to talk briefly about the duties tests. The Department of Labor has not proposed any specific 

regulatory changes to the text of the duties tests. 

However, they have also stated in an e-mail, in response to a 

question from the publication Law360, that they do not have to 

propose specific statutory—regulatory text in order to make significant changes to the duties test. In their opinion, all you have to 

do under the Administrative Procedures Act is to propose issues for 

discussion. 

I would like to suggest that words matter in statutes and in regulations. A comma placed one place versus the other can really 

make a difference about how that interpretation is—how the regulation is interpreted by DOL or the courts. 

Yet, if there are changes—if DOL goes through with making significant changes in the duties test—for example, adopting the California rule on primary duty that employers have to establish employees spend more than 50 percent of their time performing exempt duties—we will not have an opportunity to actually review 

and comment on the statutory text, and I do—in my opinion, that 

is not in the spirit of the Administrative Procedures Act and giving 

the public a sufficient time and a meaningful role in the regulatory 

process. 

Finally, I do want to talk about the impact. You have heard 

about that from some of the other increases. 

There are advantages and disadvantages to being classified as 

exempt. And the biggest advantage for being exempt is you have 

a guaranteed salary, a salary that cannot be reduced because of the 

quality of your work or the quantity of your work. An exempt worker who works even an hour during a work week must be paid their 

entire salary. 

This is where the flexibility comes in. As an exempt worker you 

can go home early. I have heard Secretary Perez himself talk about 

how important it has been in his life to have jobs that give him 

the flexibility—gave him the flexibility to attend his son’s sporting 

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With this regulation, with potentially five million employees 

being reclassified, you are taking that flexibility, which is so important, away from those 5,000 workers. Instead, as a nonexempt employee you just get paid for the hours you actually worked. So if 

you need to take time off to go to a PTA meeting you really have 

to think, ‘‘Can I afford this? Because I am not going to be paid for 

these hours that I am taking off.’’ 

The other differences between exempt and nonexempt that I 

would ask you to consider is—and I think we heard Mr. Williams 

talk about this—availability for bonuses and incentive pay. Nonexempt employees generally do not have—generally do not get the 

opportunity to earn bonuses and incentive pay because if you pay 

those bonuses you also have to pay overtime on the bonuses. 

That calculation is complex. It is easy to make mistakes, and if 

you make a mistake you could face massive liability. 

[The testimony of Ms. McCutchen follows:] 


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Chairman WALBERG. I am going to have to start paying you overtime—— 

Ms. MCCUTCHEN. I am sorry. 

Chairman WALBERG. Here soon, so—— 

Ms. MCCUTCHEN. I am sorry. I—— 

Chairman WALBERG. I think there will be plenty of time for questions on this, and you are a walking textbook—— 

Ms. MCCUTCHEN. Thank you. 

Chairman WALBERG. As each of our witnesses are. 

So, having said that, I will now recognize for first round of questioning, or first five minutes of questioning, Mr. Bishop, of Michigan. 

Mr. BISHOP. Thank you very much, Mr. Chairman. 

And thank you, to the panel. Thank you for your time. This is 

a very important issue. 

We appreciate your testimony. I know it is frustrating to have 

only five minutes to say what you want to say. This is an important subject and we would like to hear more from you. 

One of the biggest concerns that I get from my constituents in 

the businesses that I represent as I travel across my district is the 

growing administrative burden, the costs of these new regulations 

that have been descending upon small business in particular for 

quite some time. 

And it is becoming more and more stifling, to the point where 

many businesses feel like they have an entire wing of their business whose sole purpose is to deal with regulation and compliance. 

And it is really choking off small business. 

It is a big issue, and it is one that I think a lot of us are going 

to spend some time to find a solution for. But I am told that the 

department has estimated that this particular regulation in the 

first year alone is expected to cost $600 million, which to me seems 

unbelievable. And I am interested in hearing from all of you, of 

course, and I wish that I could, but in particular I would like to 

hear from Mr. Williams. 

Sir, you bring incredible perspective to this, given the fact that 

you were an employee, a middle manager, and now the CEO—COO 

of a major American business, and I am very interested to hear 

your perspective on this. You have seen it. You are inclined to want 

to do whatever you can to enhance the employment environment 

in this country, to advance the economy. 

Do you view this as a positive change to—what are the impacts— 

fiscal, administrative? Any negative impacts that this might have 

on a business such as yours? And is this an—are there many unintended consequences that we are seeing today that can be avoided? 

How can we better address this issue? I know you had a lot of 

testimony and I know you hurried through it, so I would like to 

hear more from you if I could please, sir. 

Mr. WILLIAMS. Mr. Bishop, I do believe that this will have a negative impact on the work environment. I also believe that it will 

make administrative costs go up because now we will—just basically, managers that now are salaried managers will—they will be 

reduced back to hourly managers. There is no way to avoid that. 

Now, in my own business in Indianapolis I have four managers 

that are assistant managers—that are managers that are below the 


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proposed rate, and those managers, I will have to move those salaries up to the proposed rate. And there are three managers that 

are below the proposed rate that I will have to put them back on 

the clock. This will be a very demoralizing effect, which is an unintended consequence that this regulation will bring. 

When I first took over that business one of the things that I saw 

in some of those employees was the potential to be general managers, the potential to be district managers or multi-unit supervisors. But they were being held back because we had to limit their 

hours to 40 hours per week. 

Businesses just can’t afford to pay overtime week after week 

after week, and so, unfortunately, when the business goes away 

they have to get off the clock. So it will not be a positive change, 

and I have seen where managers have been taken from salaried positions to hourly positions so that the business could thrive, and it 

is not viewed very positively by the managers or the people that 

are impacted by that, as well. 

I do not view this as being positive. 

Mr. BISHOP. So, sir, am I correct in assuming, then, based on 

your testimony, that a regulation such as this will actually have a 

negative impact to the extent that businesses like yours would be 

less inclined to hire, would be less inclined to advance their employees to a management level, and in fact, it has an effect of negatively contracting your business so that you are less likely to grow 

and be more prosperous? 

Mr. WILLIAMS. That is correct. Under the guidelines now, we 

would staff a restaurant with additional management personnel. 

Those manager personnel that are not the restaurant manager, 

they have an opportunity to grow. And so you would have maybe 

a couple of managers on the shift that would all supervise an area 

or they would all supervise employees. 

Under this guideline, those managers—we would not be able to 

afford those managers, and so we would have less management positions available. So the management position that I advanced into 

would no longer exist because we just simply couldn’t afford it. 

So yes, it would have a contracting effect and ultimately could 

not only reduce the earnings of a business, but it could have an impact on guest service and sales because there is less supervision 

available to manage the business. 

Chairman WALBERG. The gentleman’s time is expired. 

Mr. BISHOP. Yield back. 

Chairman WALBERG. I now recognize the gentlelady from Florida, Ranking Member, Ms. Wilson. 

Ms. WILSON of Florida. Thank you, Mr. Chair. 

My question is for Mr. Eisenbrey. 

According to the Economic Policy Institute, in 1975 nearly twothirds of salaried workers were eligible for overtime pay. Now only 

8 percent of salaried workers are eligible. What effect has this shift 

had on wages and on the average number of hours worked? Would 

you elaborate? 

Mr. EISENBREY. Well, it is not clear overall what it has had on 

the number of hours worked. If you look at the BLS surveys, I 

think that they show fairly steady weekly hours. But if you look 

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vey—General Social Survey, they all are showing that salaried 

workers are working longer and longer hours, to the point of the 

average being, in some of these surveys, as much as 49 hours a 

week. 

So I would say—there is no question, I think everyone at the 

table would agree, that salaried workers who don’t have to be paid 

overtime will work longer hours than people for whom overtime 

has to be paid. That is what Mr. Williams just said. 

So the effect of exempting people obviously is to increase their 

hours, and when they don’t get paid anything more for it, all it 

does is increase the stress in their lives without compensation. 

Ms. WILSON of Florida. Thank you. 

In your testimony you mentioned a woman named Dawn 

Hughey. You say, ‘‘Retail store managers like Dawn Hughey, who 

was paid a salary of less than $35,000 a year, are sometimes forced 

to work as many as 90 hours a week.’’ You go on to say that ‘‘a 

salary and a title are no protections against oppressive overwork 

and never have been.’’ 

Is that story an isolated one? Is this something that happens 

often? If so, why don’t the workers just refuse to work all those 

extra hours? 

Mr. EISENBREY. Well, workers can’t refuse to work the extra 

hours because they will be fired by their employer, the corporation 

that employed them, whether it is Dollar General or Duane Reade, 

whoever it is. We have heard stories from dozens—scores of workers who say that they, at very low pay, make—when you make 

$35,000 a year and you work 60 hours a week your pay is reduced 

to about $12 an hour. 

When you work, as Dawn Hughey did, 90 hours a week, your pay 

actually falls to below the minimum wage. And she had no life at 

all because she was working all the time for the corporation that 

employed her—until she was finally injured, until she was basically 

worn out and couldn’t work any longer. 

But that is not an isolated story, and I would be happy to share 

stories that we have received in the comments with the Committee. 

Ms. WILSON of Florida. Can you go on to discuss why overtime 

protections are even necessary for salaried workers? If workers are 

making a salary instead of hourly wages, why should they be entitled to overtime? 

Mr. EISENBREY. Well, they have always been entitled to overtime 

under the Fair Labor Standards Act. We didn’t have a 40-hour 

work week in America until the New Deal, when President Roosevelt and the Congress passed this law. And people who had been 

working 50 and 60 hours a week suddenly had a standard work 

week of 40 hours. 

The fact that they were salaried—the stories in the Department’s 

reports of white-collar workers being paid $17 a week and working 

60 hours are the very reason that we had the Fair Labor Standards Act. 

You can be a blue-collar worker—a carpenter making $60,000 a 

year and your hourly wage will be 150 percent when you work 

more than 40 hours in a week. A salaried worker making $25,000 

a year who is held to be exempt under the rule as it is now gets 


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nothing for the extra 20 hours a week. Nothing. Zero. Not timeand-a-half, not straight time, not one penny. 

Ms. WILSON of Florida. How did the Department of Labor come 

up with the proposed salary threshold? 

Mr. EISENBREY. Well, they went through the long history of the 

Act and looked at all the different possibilities. Tammy McCutchen 

mentioned one that the Dpartment has used. In 2004 they did 

something different from what had ever been done before. So there 

is no set rule in the statute about how the Department approaches 

this. 

I think that they chose the 40th percentile because it is—of salaried workers because they understand that the rule is meant to exempt a small number of top people—the bosses, the people who can 

control their own time. It was never intended to be something that 

exempted low-level accountants and people in—you know, clerks in 

insurance companies, first-line supervisors. All of those people were 

intended by the law to be covered. 

Ms. WILSON of Florida. Thank you. 

Chairman WALBERG. Gentlelady’s time is expired. 

Now I recognize for five minutes of questioning Mr. Kline, Chairman of Ed and Workforce Committee. 

Mr. KLINE. Thank you, Mr. Chairman, for the courtesy of recognizing me for questions and for holding this hearing. 

Ms. MCCUTCHEN, it is good to see you again. Welcome back. 

There seems to be a difference of opinion here that at least I am 

hearing between Mr. Eisenbrey’s view of the 40th percent threshold—percentile and yours. And you were making a point, Ms. 

McCutchen, in your testimony about how this is unprecedented to 

go to the 40 number instead of 10th and 20th percentile, which had 

been more normal. 

And you started to say—in fact, you had about one sentence 

worth or so in here—that you were comparing New York and California, but I think you picked Biloxi but we could pick a whole lot 

of other places. Can you take a minute or two here and talk about 

what that difference means—the difference in economies, the difference between rural America and places like San Francisco and 

Manhattan? 

Ms. MCCUTCHEN. Certainly. It does make a difference, because 

in 2004 we looked at salary levels in the rural Midwest and the 

rural South. We looked at salary levels in different industries. 

And I guess the best way to put it is where I grew up in the 

Quad Cities, Illinois—Moline, Illinois; Davenport, Iowa—you can 

buy a house for less than it costs you to park a car in New York 

City, right? And so a $50,000 salary level in some place like Indianapolis, Indiana, for example, is a very, very good living because—a salary, and it is among the top of the salaries in that area 

because of the low cost of living. And so trying to apply something that, yes, maybe $50,000 

works—well, I was going to say maybe it would work in California, 

but not even California thinks $50,000 would work in California 

since their level is $37,000. So I am not sure where this works outside of San Francisco and New York City themselves, but what it 

does is it is just not in line with local economies and the realities 

of local economies. 


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And that is what DOL has always tried to do is to look at the 

actual salary levels that are reflected, to draw that line between— 

to exclude only the obviously nonexempt. And if you think about, 

for example, your own staff who are earning less than $50,000— 

from the duties they perform there is going to be a lot of them that 

are not obviously performing nonexempt duties even though they 

earn below $50,000 a year. 

Mr. KLINE. Yes. Thank you. It concerns me—we are always worried about a one-size-fits-all, and in this case you were talking 

about what the purpose was. 

Mr. Eisenbrey has said this is to affect the boss’s boss kind of 

thing, and you were making the point that no, that was never what 

this was really designed to do, to go back to the very beginning. 

And so you were talking about where you looked and where to set 

that bar based on what seems to be a different criteria than what 

we had heard about. 

Can you just touch on that again? You had it in your testimony 

but I want to get that clear. 

Ms. MCCUTCHEN. Well, the salary is not the only test for exemption, right? Employees who are paid by the hour who earn below 

the minimum salary level must be paid overtime, but if you earn 

more you still have to meet the duties tests, which are quite substantial, right? 

And that is why the purpose is to drawing the line is to exclude 

the obviously nonexempt—the employees who, just based on their 

salary alone, are unlikely, in the department’s view, to ever be able 

to meet the duties tests. And so it is not—this is not a minimum 

wage debate, right? 

And so this is not about increasing and cutting—you know, getting rid of wage stagnation is not the goal here. The goal is to have 

rules that will allow at least some bright-line judgments, in the Department of Labor’s eyes, about who earns a salary that is low 

enough that they are obviously nonexempt even if the duties tests 

are applied. 

Mr. KLINE. And then when you—once you get past that obvious 

line, then you are going to get into the duties tests, which we 

haven’t—— 

Ms. MCCUTCHEN. That is correct. 

Mr. KLINE. Yet seen in this thing. 

Ms. MCCUTCHEN. Which we don’t really know—— 

Mr. KLINE. Which we don’t know yet. 

Ms. MCCUTCHEN. Right. 

Mr. KLINE. Right. Exactly. 

Okay. Thank you very much. I yield back, Mr. Chairman. 

Chairman WALBERG. I thank the gentleman. 

And now I recognize the gentleman from Virginia, Ranking Member of the full Committee, Mr. Scott. 

Mr. SCOTT. Thank you, Mr. Chairman. 

Ms. McCutchen, you mentioned someone who would be entitled 

to their salary even if they worked one hour a week. Is it your testimony that somebody showing up one hour a week can expect to 

receive their salary on any kind of ongoing basis? Is that your testimony? 


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Ms. MCCUTCHEN. Yes. That is called the salary basis test. That 

is a third test for exemption. And what the salary basis test is— 

was—— 

Mr. SCOTT. Well, I just asked you, if somebody is showing up one 

hour a week—— 

Ms. MCCUTCHEN. Yes. 

Mr. SCOTT. It is your testimony that they can keep their—— 

Ms. MCCUTCHEN. They are—— 

Mr. SCOTT. That they can keep their job? 

Ms. MCCUTCHEN. Well, I have done it and I haven’t lost my 

job—— 

Mr. SCOTT. Okay. Well, we just receive the testimony as it is 

given. 

Ms. Hays, most people think of full-time work as 40 hours a 

week. How often do you require employees to work more than 40 

hours? 

Ms. HAYS. The need to work 40 hours or more than 40 hours a 

week would be dependent on what is transpiring in the course of 

delivery of services. We don’t mandate that our exempt employees 

work any specific number of hours, but we do have children very 

often who are in crisis during the course of any given day—or 

night. 

Mr. SCOTT. Right. And when you ask them to work more than 

40 hours, what compensation do they get for the hours after 40? 

Ms. HAYS. For exempt employees they don’t receive additional 

cash compensation. They can flex their schedules—— 

Mr. SCOTT. Okay. Now, if they don’t get any compensation over 

40 what—is there any limit to the number of hours you can ask 

someone to work for no compensation—no additional compensation? 

Ms. HAYS. We don’t assign a limit, but MHY is committed to 

something called self-care as part of the sanctuary model. We 

preach regularly the need to balance work and life as part of a 

model of treatment and care that takes into consideration both the 

safety and needs of clients as well as our employees. 

Mr. SCOTT. Well, Mr. Eisenbrey, if someone is required to work 

more than 40 hours a week what, in most cases, when the employer says, ‘‘We need you to work 50 hours this week,’’ what happens if they don’t show up? 

Mr. EISENBREY. Well, there is no proscription against mandatory 

overtime, and that employee could be fired. 

Mr. SCOTT. Okay. Now let’s go through a couple of scenarios. 

Somebody is making $10 an hour and they work 40 hours a week. 

If they were to work a few extra hours, how would they be compensated for that—for those extra hours? 

Mr. EISENBREY. Well, if they are hourly they would be paid timeand-a-half, 150 percent of their regular rate. If they were salaried 

they wouldn’t be paid anything more. 

Mr. SCOTT. If they were salaried under the threshold? 

Mr. EISENBREY. If they were salaried under the threshold then 

they would not be exempt. They would be entitled to overtime. 

Mr. SCOTT. So somebody making $10 an hour, about—full-time, $20,000 a year, they would get time-and-a-half? 

Mr. EISENBREY. They would, yes. 


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Mr. SCOTT. Okay. Now, if somebody is making $15 an hour and 

they work the additional—more than 40 hours—they are paid $15 

an hour on an hourly rate, they would get overtime—time-and-ahalf. Now, if you converted that to $30,000 a year, what kind of 

compensation would they get for the extra hours? 

Mr. EISENBREY. If they were hourly? 

Mr. SCOTT. No, if you called it $30,000 a year salary. 

Mr. EISENBREY. If they were in an exempt position they wouldn’t 

get—they would have no right to any overtime pay at all. 

Mr. SCOTT. Any right to overtime pay or any extra pay at all? 

Mr. EISENBREY. Any pay beyond the $30,000. 

Mr. SCOTT. So if you are making $15 an hour you get time-anda-half over 40. If you are making essentially the same, $30,000— 

if you call it $30,000 a year then you not only don’t get the right 

to over time time-and-a-half, you don’t get any extra salary at all. 

Mr. EISENBREY. You don’t have the right to a penny for the extra 

hours. That is right. 

Mr. SCOTT. Can you say a word about how the new rule will reduce litigation involving overtime? 

Mr. EISENBREY. Well, you know, in 2004 the rule was put out 

and—with the promise that it would reduce litigation. And since 

then, litigation has tripled. So I think changing the duties tests, as 

they did, led to a lot of litigation. 

This rule, by contrast, as it has been proposed, is as simple as 

it could be. It just tells an employer, ‘‘If you pay a salary less than 

$50,440 a year, the person is entitled to overtime pay.’’ I mean, 

that could not be clearer, and it will affect about 15 million people 

who otherwise might be subject to litigation because they don’t 

know whether they are—and their employers aren’t sure whether 

they are exempt or not. 

Chairman WALBERG. The gentleman’s time is expired. 

I now continue with the state of Virginia and recognize Mr. Brat 

for his five minutes of questioning. 

Mr. BRAT. Thank you, Mr. Chairman. 

I think it is first of all important to note that I think everyone 

in the room here has the same goal. We would all like people to 

be richer and do better and have happier lives with the family and 

the kids. 

The only problem with this proposal—and it is important to look 

at this proposal. Everyone is nibbling around the edges, right, 

about certain groups of people and certain kind of moves around— 

in the short run around wage rates and pay and hours and this 

kind of thing. 

I think it is important to go back to the long run to show that 

this kind of procedure—at the macro level these kinds of policies 

will fail, right? And so in the long run—I made a very high-tech 

graph here; it is just a straight line going up—in the long run your 

wage rate is, roughly speaking, the same thing as your productivity, and there is no cheating that. We would all like to just announce to the world that everyone can make $500 an hour, et 

cetera. 

So just do that thought experiment. Any students out there? 

Let’s just pay everyone $500 an hour. Is that possible? 


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No, it is not possible. Everyone knows that, because wages have 

to track productivity. 

And so instead of dealing with the underlying issue that matters 

in this country—enhancing productivity—we tried to do an end run 

with clever little procedures that in the short run may enhance 

wage rates or hours worked, you know, and that is a little wrinkle 

in this nice line. But over the last 200 years, economies that don’t 

focus—and countries. Our country has had phases of time where 

we let Rome rule, right, the central planners up here, and we don’t 

do as well as a country. 

And so at a time where we should all be talking about productivity growth, because that is the only thing that gives the next 

generation of kids a good life, we are still doing this little nickeland-diming around the edges. 

And so, as my colleague brought up before, when we go around 

door to door and talk to the vast number of small businesses, and 

the CEOs in the room, and the folks that are speaking on the economy, we hear the opposite is going on. Instead of enhancing productivity we find small business talking about the regulatory burden. 

I think for the country as a whole it is about $1.5 trillion. Per employee, I think it is $10,500 per employee in regulatory costs 

that go on to every small business. 

We have the Affordable Care Act. Obamacare is crushing small 

business and making it harder to pay people. The EPA overreach, 

regulatory burden, et cetera. 

And what we are missing, in some of the testimony we started 

hearing hints at what is really going to happen. What is really 

going to happen in the short run, too, is people are going to get 

fired. And we don’t pay attention to them. 

They are off. They are not in the labor force anymore, right? So 

we don’t look at them, but they are going to lose their jobs. Firms 

are going to substitute capital for people and hire more little smart 

screens instead of people. 

And so it is nice to have all these clever little ideas in mind, but 

in the long run the bottom line is any country that over the long 

run tries to run their economy from Rome and from central government land is no longer a nation, right? 

And you have the perfect case study with Greece going on right 

now, right? They have moved in this direction. I think the youth 

unemployment rate is 50 percent, right, youth out there. If you 

want 50 percent unemployment rate for the youth, go towards centralized planning. 

And so I would just question for Mr. Williams or the Honorable 

McCutchen: Can you comment in the business world on how we 

can be more effective at enhancing—at getting to this goal by increasing productivity and just what we can do to really make 

progress? Because I think we all have that goal in mind. 

And, Mr. Williams, if you want to lead off? 

Mr. WILLIAMS. With respect to productivity—and I have heard 

the testimony of some of the other witnesses that talk about 90 

hours and 100 hours. In those scenarios that is very low productivity. And even as being a manager myself for years and years and 

years, I have investigated those kinds of comments and those kinds 


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of claims, and what we find is very low productivity if not some 

embellishment, in terms of, you know, what that person is really 

doing with their time. 

So yes, I would agree with you that low productivity will be enhanced because an individual will now just ride the clock. If I have 

an opportunity to enhance my pay by working 50 or 60 hours then 

that becomes my bonus and I enhance my pay that way. 

The manager that is salaried that realizes what the goals are of 

his job now becomes the more productive manager because they 

recognize that I am going to get paid my salary whether I work 30 

hours or whether I work 40 hours. 

I think the thing that we have missed here is that—and I think 

one of the questions was, do I—would I expect to get a check for 

one hour? Yes. And I have gotten a check for one hour before. 

I come in, I count inventory, I leave, and I go home. And that 

was my job for that day and that was my job for that week, and 

I did it and I got paid. So I was very productive with that, and I 

will yield the rest of my time to—— 

Ms. MCCUTCHEN. Well, I think—— 

Chairman WALBERG. The gentleman’s time is expired. And you 

really are a professor, aren’t you? Yes. Yes. Thank you. 

Now I recognize the gentleman from Wisconsin, Mr. Pocan. 

Mr. POCAN. Sure. Thank you, Mr. Chairman. 

Well, you know what? I will pick up on that, on the productivity 

question, because here is the number I am looking at: Since 1973 

productivity has gone up 74 percent. The hourly compensation for 

a typical worker in the same period has gone up 9 percent. The average CEO pay during that same period, 937 percent. 

Something doesn’t quite add up on all those numbers when you 

look at that. 

And then I am looking at this rule and specifically the fact that 

only 8 percent of the people are currently, you know, covered under 

this area, and we are trying to get to the 40 percentile, when in 

the past we have been up to 62 percentile back in 1975. 

I am a small business owner. I have been since I had hair. Since 

I was 23 years old I have run a small business, and I will tell you, 

I just look at it differently. I look at my employees as my partners, 

not as a line on my budget. And unfortunately, this conversation 

so seems like we are talking about employees as simply a line on 

the budget, as some end sum game. 

I think, Ms. McCutchen, you made a comment about the benefit 

of having a guaranteed salary. You know what you are going to 

make no matter what your productivity is. Kind of doesn’t work in 

the real world. 

I don’t know if you have ever had a small business and had employees where this ever affected you but, you know, it is not a benefit to know you are only going to make so much even if you work 

60 or 70 hours a week. And, quite honestly, if someone is not productive we are not keeping them on anyway. We are not keeping 

someone on if they are not productive just because we have the 

benefit of giving them this salary. 

And then we talked about how they are less likely, if they are 

nonexempt, to get a bonus. That is not true either in the real 

world. 


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I think people still can get bonuses in a lot of different business 

structures. There is no rule that says you don’t have to. You are 

saying simply because they will pay overtime on it, but maybe they 

should be paying overtime instead of having their employee work 

for free after making $24,000. 

So here is the question I have, since we brought up Biloxi and we brought up San Francisco: If you are making $23,660 that is 

take-home, before tax, $1,971 a month. The median rent in this 

country according to Zillow, I looked it up, is $1,350 a month. Can anyone make a strong case how that makes sense? $1,971 

a month, overtime you are not going to get any extra pay, but the 

median rent is $1,350 before your utilities, before any kind of car, 

before any kind of cable, food, entertainment, et cetera. 

You want to talk about San Francisco? Even under that new dollar amount they are coming into in 2016, they are going to now be 

having $3,416 a month. You are right, it is different in different 

parts of the country. But that median rent is $3,055. It is still lopsided. The worker gets screwed over every time no matter how you 

do it. 

Let’s go to Biloxi, all right? Biloxi, you are right, it is lower cost of living. But you know what? In Biloxi that median rent is $813— 

40 percent of your gross salary. 

So the problem we are having is we need to talk about how you 

affect a real employee, real wages, so you have got a productive 

employee. And quite honestly, keeping them at poverty level and 

making them work for extra hours for free and not being able to 

even get by much past the rent doesn’t make any economic sense. 

Let me ask a question, Mr. Eisenbrey. One of the things that has 

come up over and over and over is this benefit that you can take 

a Friday off or leave work an hour early after you have worked 60 

hours a week under this scenario. 

What is the real benefit to this flexibility for an employee? Because I still look at it, if they are working 60 hours a week that 

is 1,000 extra hours a year they are not getting paid for that you 

don’t see your family so you can get that Friday off. To me, I don’t 

see the benefit—cost-benefit ratio, but if you could share a little bit 

from your research. 

Mr. EISENBREY. Well, we did a report on this. Lonnie Golden, a 

professor at Pennsylvania State University, used the General Social Survey to see what happens in terms of flexibility, asking employees who are salaried and hourly who make less than $50,000. 

Actually, the survey asked between about $25,000 and $50,000, so 

it was perfect for this rule. 

And he found that you are actually more—somewhat more likely 

as an hourly employee to be able to take off an hour or two during 

the day than a salaried worker. It is not common that anyone can 

do that. Salaried workers don’t generally have that right, but there 

was actually no more flexibility in that range. 

Once you get up to a real executive salary, you know, to Tammy 

McCutchen’s or my salaries, then people start to have the ability 

to actually take the time off, but it is not—— 

Mr. POCAN. Thank you. 

And real quick—I have very little time—Ms. McCutchen, a quick 

question: Do you think 150 percent is the right number? Should it 


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be higher or lower? What kind of number should we have at that 

rate? 

Ms. MCCUTCHEN. I want to make clear, I am in agreement that 

it is time for a salary level—— 

Mr. POCAN. Yes. My question, though, is on the 150 percent. If 

you could very quickly, I am on the yellow light. The only reason 

I am asking—— 

Ms. MCCUTCHEN. On the overtime, time-and-a-half has been the 

way it has been in the FLSA—— 

Mr. POCAN. So you don’t have a problem with that? 

Ms. MCCUTCHEN. No. 

Mr. POCAN. Okay. 

Thank you. I yield my time back. 

Chairman WALBERG. Thank the gentleman. 

I recognize now for five minutes of questioning the gentleman 

from Pennsylvania, Mr. Thompson. 

Mr. THOMPSON. Thank you, chairman. Appreciate the opportunity for this hearing. 

Ms. Hays, I want to say welcome. As a fellow Keystone State person, I wanted to welcome you to the hearing and also thank you 

for your role in providing critical support services—at-risk youth, 

all the things that your agency does. 

Having worked, well, my—as I like to say, when I had a real job 

it was really—a lot of that time was spent working with nonprofits, 

and recognize that the workforce that we need, you know, is based 

on the, you know, the level of—the types of services they are providing, the intensity, and it is cyclical sometimes. And having that 

flexibility. So my question—flexibility in terms of how do we deploy 

that workforce, as well, so that it works well for the employee and, 

quite frankly, fulfilling the mission. 

And so I really do have a vast appreciation for nonprofit organizations and their admirable missions. 

And, given your experience overseeing such an organization, can 

you elaborate on how the administration’s overtime proposal will 

impact nonprofit employees and their relationships with those that 

they are serving, to be able to fulfill that mission? 

Ms. HAYS. I think one of the biggest concerns that we have is 

around continuity of care. With an increase like that which we are 

discussing today, it would be a priority to be able to move individuals around who are professionals—therapists, as an example—to 

avoid overtime costs—again, unfunded overtime costs. 

In terms of continuity of care, you spend a very long time, as I 

said in my testimony, developing relationships with the clients that 

we serve, with their families, with the case workers that we work 

with within the counties. There is a lot of time dedicated to developing those relationships and that rapport and that trust, notably 

with the clients, first and foremost. 

You can’t just switch out therapists to offset time worked to 

avoid additional overtime costs. It diminishes continuity of care. 

There is not the same level of communication with those clients as 

with the primary caregiver—with the primary support services. 

That would be a significant concern for us. For MHY it would be 

paramount to control significantly what—who are now exempt professionals and managers, the amount of time that they are putting 


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in to handle crisis, to support staff who are handling crisis, and 

again, to provide direct care services both on our residential campus as well as out in the community services field, where we have 

several therapists who have a great deal of autonomy in when they 

meet clients, when they meet with schools, social workers, caseworkers, the families, get them all together. There would be a great 

deal of controls on that, and another level of bandwidth that we 

can’t afford to administer that. 

Mr. THOMPSON. Very good. Thank you. 

Ms. McCutchen, the Department of Labor proposes to automatically increase the salary threshold annually based on either the 

40th percentile of salaries or inflation, which would lead to rapid 

increases in the threshold. As your testimony points out, Department of Labor has repeatedly rejected automatic increases due to 

concerns regarding the impact on certain regions and industries. 

What problem do you see in automatically increasing the salary 

threshold? Was it Congress’ intent in the law for the salary threshold to increase automatically? 

Ms. MCCUTCHEN. I question whether it was Congress’ intent. 

Congress itself has often rejected proposals to index the federal 

minimum wage for annual increases in inflation. And in 1996, 

when Congress enacted the exemption for computer employees at 

an hourly rate, they did not increase that—have any indexing of 

that hourly rate for inflation. 

And the problem with using the 40th percentile is it is going to 

have a ratcheting effect. In 2006, as employers increased some people’s salary in order to get them over that 40 percentile level, that 

means the next time you look at the data set it is going to be higher salaries. And so the 40 percent level keeps moving up and moving up, ratcheting in geometric levels, until there is virtually no 

nonexempt—people who qualify for this exemption. 

And I, contrary to Mr. Eisenbrey, this exemption has been in the 

FLSA since 1938. It has always been the largest exemption. 

There is actually over 50 exemptions in the FLSA, partial or 

total, from the overtime and minimum wage requirements. So I 

don’t see any evidence that it was ever intended to be a tiny exemption. 

Mr. THOMPSON. Thank you, Chairman. 

Chairman WALBERG. Gentleman’s time is expired. 

And I now recognize the gentlelady from Ohio, Ms. Fudge. 

Ms. FUDGE. Thank you very much, Mr. Chairman. 

I thank you all for your testimony today. 

I guess maybe I am one of the few people that really lives in the 

real world here. Hiring is based on need. People hire people because they need them; they don’t hire them out of the goodness of 

their heart. And so if you don’t need a person, you don’t hire them. 

You are making it seem, to me, that you are doing them a favor 

by hiring them and then making them work a lot of hours and not 

paying them. That is not how this business works. 

It is supply and demand. That is just basic, simple economics. 

Mr. Eisenbrey, is there any data that you are aware of that supports the premise that higher wages causes job loss? 

Mr. EISENBREY. No. I think that one of the big problems with our 

economy right now is that wages have been held down so long that 


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the power of consumers has been reduced and, therefore, businesses are not hiring. They don’t have the customers they need. 

And that is what every survey of small business says, by the 

way, that the problem is not regulations. That is not the first thing 

that they say. 

Ms. FUDGE. Correct. 

Mr. EISENBREY. Their first problem is, ‘‘We don’t have the customers we need.’’ 

Ms. FUDGE. Thank you very much. 

And so Mr. Williams’ premise that overtime pay is a penalty— 

and I believe I wrote down exactly what you said—is actually not 

accurate, is it? 

Mr. EISENBREY. Well, in a sense he is right. It is a penalty on 

employers who work their employees excessive hours. 

Ms. FUDGE. That is what I thought. 

Mr. EISENBREY. It makes it more expensive for them to do that. 

Ms. FUDGE. Thank you. 

Mr. Williams, you say you have about 75,000 employees. First, 

let me congratulate you for working your way up. I think that that 

is the American dream. I appreciate that. 

I started working at McDonald’s. I understand the process. 

You have 75,000 employees. Approximately how many of them 

are management employees? 

Mr. WILLIAMS. It would probably be about 30 percent. 

Chairman WALBERG. The microphone. 

Ms. FUDGE. So 30 percent of your employees are management 

employees. You don’t mind paying the other 70 percent overtime, 

correct? 

Mr. WILLIAMS. That is correct. If they work over 40 hours they 

get time-and-a-half. 

Ms. FUDGE. And so what is the responsibility of a manager, just 

a regular line manager? What are their duties, as a general rule? 

Mr. WILLIAMS. Exempt or nonexempt? 

Ms. FUDGE. Exempt. 

Mr. WILLIAMS. Well, an exempt manager has to pass the duties 

test, and so they would have to be a bona fide executive. They 

would have to have the responsibility of hiring and firing. They 

would have to be the person that manages the business according 

to the duties test of the Department of Labor. 

Ms. FUDGE. Okay. So basically, you have very trusted employees, 

people that do a great job, just as you do with your people that 

work with your children—and I think that is a great thing that you 

have people that you trust, that you believe in, that you trust with 

the lives of kids. But you guys don’t want to pay them. That is 

what I don’t understand. 

You have these valued employees in which you have put a lot of 

time and a lot of money, a lot of energy, you trust them, and then 

you want to restrict their pay when you make them work 60, 70 

hours a week. It just doesn’t seem to mesh to me that you value 

your employees if you don’t want to pay them. 

Mr. EISENBREY. Ms. Fudge, may I just correct the record on 

something? 

Ms. FUDGE. Yes. 


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Mr. EISENBREY. It has been said that this is the biggest increase, 

you know, that we have ever had in the salary threshold. I just 

want the record to reflect that it has been 11 years since the last 

increase. From 1938 to 1949 was 11 years and the increase in the 

salary threshold for administrative employees went from $30 to 

$75 a week, which was 150 percent. So that is not true, and I think 

that we need to keep it in perspective. 

Ms. FUDGE. Thank you. At least I, you know, I very much appreciate Ms. McCutchen talking about the fact that it is time for a 

wage increase. I appreciate that, because it is. The very people that 

you all represent, low-income people—they are the ones who need 

it the most. 

I appreciate that you hire young people in communities of need, 

but they are the people who need the increases more than anyone 

else. So yes, you are helping them in one respect, but you are holding them down in another. 

So I just want to thank all of you for your testimony. I am hopeful that as we go forward we can find some way to come together 

to try to help the people that all of us, I believe, want to help. 

Mr. Chairman, I yield back. 

Chairman WALBERG. I thank the gentlelady. 

I now recognize the gentleman from Indiana, Mr. ROKITA. Mr. ROKITA. Thank you, Mr. Chairman. I appreciate you holding 

this hearing. 

I appreciate the witnesses’ testimony. 

Mr. Williams, I appreciate you operating a business in Indiana, 

where I am from. Thank you for what you do in the community and 

the experience you give employees at various different levels, some 

of them whom it is a first-time job experience, some have a parttime job experience, so that they can offer better lives for themselves and their families, which I think is part of the American 

way. 

First off, do you have any further response to my colleague, Ms. 

Fudge’s, comments or anything that she said? Anything you want 

to add for the record? 

Mr. WILLIAMS. Well, I just want to make sure that—I want to, 

I guess, tie two thoughts together. One, the thought on productivity. The more productive managers get better results, and so 

that is ultimately how you measure whether or not a person is productive: What did you get done? 

And to say that a more productive manager or a person that 

works more hours, that we don’t want to pay them just really isn’t 

reality. 

Mr. ROKITA. Right. Because for one thing, they can go somewhere 

else, right? 

Mr. WILLIAMS. One, they—— 

Mr. ROKITA. With the experience that you gave them, that they 

learned from you, they can walk right away. And that is—there is 

a cost to that, isn’t there? 

Mr. WILLIAMS. Absolutely. And businesses, over time, have recognized the value of their employees, like our business. We recognize 

the value of the employees. 

And so what businesses have done to reward employees that— 

particularly salaried employees, is they put performance incentives 


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together so that that employee—that a more productive employee 

has an opportunity to actually earn more money than they would 

by logging additional hours. 

And that is the incentive process that we have in place both at 

the company I own and CKE that we manage. And it is common 

throughout the industry. 

Mr. ROKITA. Right. Well, thank you for that. 

I associate with Ms. Fudge when she says, you know, this is not 

done out of the goodness of hearts or the businesses to be run and 

all these kind of things, and she mentioned supply and demand. I 

think that is exactly right. It is another way that I describe the 

free market, and that you can freely go to another job, or not, or 

stay and have that kind of relationship with your employer. 

The 90-hour example, where this person—this worker was seemingly forced to work 90 hours and not compensated for it, I want, 

Ms. Hays, you and, Mr. Williams, you to comment on that. 

I will switch over to Ms. Hays for a minute. In your experience 

have you ever met someone who worked 90 hours like that and was 

so productive that couldn’t get a job somewhere else if they wanted 

to or—any comment on this whole situation? It seems odd to me. 

Ms. HAYS. The short answer—— 

Mr. ROKITA. Is your mic on? Yes. 

Ms. HAYS. Forgive me. 

The short answer is no. You know, if folks are working 90 hours 

a week in an exempt capacity there certainly are alternatives if an 

employer is not recognizing that, either by way of compensation or 

flex time or some other method that would offset the balance of 

that. 

Frankly, I think the folks that we have who work probably the 

most hours in any given week are, in fact, our direct care staff who 

earn time-and-a-half. 

Mr. ROKITA. But yes, so you are either compensated for it—— 

Ms. HAYS. Correct. 

Mr. ROKITA. You know, or—— 

Ms. HAYS. That is correct. 

Mr. ROKITA. You have some other—— 

Ms. HAYS. Right. 

Mr. ROKITA. Avenue. 

Mr. Williams, anything to add there? 

Mr. WILLIAMS. I agree with Ms. Hays that the managers that 

work more hours generally are not as productive, and generally if 

you have a manager that is working that many hours it is generally a crisis situation and it is very isolated. 

Mr. ROKITA. So there is a productivity situation—— 

Mr. WILLIAMS. There is a productivity issue. 

Mr. ROKITA. Certainly if you want to have that kind of lifestyle 

and you can be productive you would either be compensated for it 

appropriately or you would soon be somewhere else—— 

Mr. WILLIAMS. Or your—— 

Mr. ROKITA [continuing]. For a more appreciative employer. 

Mr. WILLIAMS. Your results would demonstrate that productivity 

and would be rewarded by the benefits that you have achieved 

within the business, whether it be bonus or additional flex time or 


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employees that are developed to take your place, those sorts of 

things. 

Mr. ROKITA. And again, the simple law of supply and demand 

that Ms. Fudge rightly points out handles this. 

Mr. WILLIAMS. Absolutely. 

Mr. ROKITA. Everything you are describing right now. Thank 

you. 

Mr. WILLIAMS. Absolutely. I would agree with that. 

Mr. ROKITA. Ms. Hays, the President’s March 2014 memorandum 

to the Secretary of Labor directed him to, quote: ‘‘simplify the regulations to make them easier for both workers and businesses to understand and apply.’’ 

As an H.R. professional, do you think this rule succeeds in simplifying the FLSA’s overtime regulations or do you see this rulemaking as really a missed opportunity to help employers comply 

with the law? 

Ms. HAYS. We don’t generally have a great deal of difficulty with 

the overtime regulation in that respect, as it relates to the memorandum. We are managing it fine. 

We are a very flat organization. Nonprofits tend to be so. So, you 

know, there isn’t a lot of creative interpretation that we have to 

manage to assign exempt versus nonexempt status. 

Mr. ROKITA. Okay. Thank you. 

My time is expired, Mr. Chairman. 

Chairman WALBERG. I thank the gentleman. 

Now I recognize the gentlelady from Oregon, Ms. Bonamici. 

Ms. BONAMICI. Thank you very much, Mr. Chairman. 

And thank you, Ranking Member, for allowing me to participate 

even though I do not serve on the subcommittee, but I am on the 

full committee and this is an important issue. 

Thank you, to all of our witnesses, for being here today. 

And this hearing is about the administration’s proposal to update 

overtime rules. And it is going to be important to actually hear 

from the Department of Labor about the proposed rule and why it 

is needed, and I look forward to those conversations. But I am glad 

we are having this discussion today. 

I want to sort of—I am a big-picture person and I want to point 

out that the issue, as I see it, people are working hard. Too many 

people are working hard and barely making ends meet. 

They are worried about whether they can save for their kids to 

go to college, retirement security, whether their children will do 

better than they did. I mean, that is everybody’s dream that, you 

know, their kids will be able to do better. People are worried about 

that now because there are too many families that are just barely 

making ends meet even when they are working full time. 

So it is important that we have this discussion not only about 

overtime but also about other workplace policies that have not kept 

up with our changing workforce—things like fair scheduling practices, paid sick leave. 

You know, hourly workers often face unpredictable and irregular 

work schedules, and in many cases they have very little say about 

the dates and the times that they work. We have heard about employees getting to work and then being told that they are not needed but they don’t—they have cleared their day and then they don’t 


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get compensation for that. This all adds to the challenges that 

working families have trying to balance their responsibilities at 

home and at work. 

I am proud to be a cosponsor of the Schedules that Work Act, that give workers more of a say in scheduling and provide more 

predictability in scheduling practices and certainty and financial 

security for families. I want to note that there have been advances 

in technology that really make that feasible now, more so than it 

has been in the past. 

My home state of Oregon has been a leader. Legislature just 

passed a comprehensive paid sick leave law that allows workers to 

earn sick time that can be used not only for their own but for immediate family’s illness, preventive care in instances of domestic violence. 

I mean, those are important policies. We don’t want people coming to work sick. We don’t want people stressed out and sending 

their sick kids to school. 

Family-friendly policies like this actually help businesses recruit 

and retain. They have good, loyal employees, and it decreases turnover and the costs associated with that. 

There is a young man in Oregon who told a quick story. He said 

he is in high school in the 12th grade. He said, ‘‘I live with my 

mom and three siblings. Whenever one of my siblings gets sick I 

have to stay home and take care of them because my mom has to 

go to work to provide us with what we need.’’ 

He said, ‘‘It is my last year in high school, and having to skip 

school and stay home to take care of siblings affects me. I need to 

complete all my homework and projects. I want my mom to be allowed to have paid sick days so I can complete all my work as a 

student.’’ 

That is just an example about the need for our updated policies. 

That kind of situation is unacceptable. 

Paid sick leave will help his family and others like theirs, just 

like the overtime proposal will help working families across the 

country. It is past time that we update the rule to keep pace with 

our changing economy, our changing workforce. 

Mr. Eisenbrey, I wanted to ask you to discuss the—what you see 

as the effect of this rule on workers’ hours and wages. Now, there 

was a suggestion in some of the testimony that workers may be reclassified from salaried to hourly, and then as a result see their 

pay reduced if they need to take time off. For example, if they are 

not in a place where they have paid sick leave or if—they want to 

attend a school function with their child, for example. 

Do you see this rule being used to actually change salaried employees to hourly, and then they may lose pay because they need 

to take time off? 

Mr. EISENBREY. All of the studies that have—that I have seen so 

far—the National Retail Federation, Goldman Sachs, the Department of Labor’s analysis, and our own—suggest that employers will 

respond to this in different ways. 

You know, Mr. Pocan, as a small business person, would just 

give the people overtime pay who are earning less than the threshold. Other employers will, as Mr. Williams said, probably convert 

some of their people to hourly, people who were salaried. And when 


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those people now work overtime, if they do, they will be paid timeand-a-half. 

People who are close to the salary threshold will have their sala- ries raised. So if you are making $48,000 a year and the threshold 

is $50,000, an employer—it will be in the employer’s interest to 

raise your salary to be above the threshold so they can continue to 

work you overtime hours without time-and-a-half pay. 

It is certainly the case—all of the studies suggest that employers 

will convert some salaried people to hourly. Most importantly, they 

will shift hours from people who are currently managers, let’s say 

working 20 hours a week extra. 

If they had to pay time-and-a-half to them they will say, ‘‘No, I 

will switch those hours to new people—to part-timers, to people 

who are on my payroll now working reduced hours.’’ The hours will 

be shifted to them. 

The Goldman Sachs suggests 120,000 jobs will be created 

through that process. The Retail Federation said over 110,000 

jobs—just in their sector, and they are only 20 percent of American 

employment. So you can imagine that—and the Department of 

Labor is closer to Goldman Sachs. 

But I think hundreds of thousands of jobs are likely to be created—— 

Ms. BONAMICI. Thank you. I see my time—— 

Chairman WALBERG. The gentlelady’s time is expired. Appreciate 

it. 

I now recognize the gentlelady from New York, Ms. Stefanik. 

Ms. STEFANIK. Thank you, Mr. Chairman. I yield my time to you, 

Chairman Walberg. 

Chairman WALBERG. Oh. Thank you. I certainly can use it. 

Let me continue on with that statement by Mr. Eisenbrey. 

Mr. Williams, it is indicated Goldman Sachs and others indicate 

increased jobs. Does that bear out in your life experience that this 

change in rule on overtime rules would increase jobs in your business? And how would it, if it does? 

Mr. WILLIAMS. Well, it could increase lower-level jobs at the 

low—— 

Chairman WALBERG. Lower-pay, lower-level jobs. 

Mr. WILLIAMS. Lower-pay, lower-level jobs, yes. 

Chairman WALBERG. With less opportunity? 

Mr. WILLIAMS. With less opportunity. Because after the 20 hours 

that was mentioned—it has to pass through the test of, is there 

anything in those 20 hours that we can get rid of? Is there anything in those 20 hours that we can outsource? Is there anything 

in those 20 hours that we can move to employees to make them 

more productive by eliminating those same things out of their jobs? 

So after you have passed through that test then what is left 

might be those lower part-time jobs at the lower—in the lower pay 

scale. 

Chairman WALBERG. Ms. Hays, would you concur? 

Ms. HAYS. I would absolutely—— 

Chairman WALBERG. With your employees? 

Ms. HAYS. I would absolutely concur with that. You know, the 

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ing to support additional jobs, be they manager-level positions in 

one case, or, as Mr. Williams is discussing, the front-line positions. 

You know, most human services organizations, and ourselves— 

MHY included, don’t have that luxury. We can’t just add positions. 

We can barely fill the positions that we have right now. 

So, but, you know, they would be front-line jobs, by and large, 

to relieve managers of anything that we could in their job responsibilities. 

Chairman WALBERG. Could this impact on MHY’s mission of promoting safety, health, education, spiritual well-being of the youth 

and families under your care? 

Ms. HAYS. Yes. Significantly so around safety. One of the things 

that our managers and supervisors are so good at—and what they 

have been—their experience brings to the table is when we have 

crisis situations with our kids, their leadership, their experience, 

their education, their training helps to de-escalate those situations 

a great deal. Now, certainly our staff are trained in those areas as 

well, but they don’t have the experience that a manager line does. 

Diminishing their ability to stick around on, you know, really 

dicey days to help manage new admissions and the emotions and 

the behaviors that come with that, or a bad family visit in which, 

you know, kids could spend the rest of the evening in an escalated 

state and be very unsafe to themselves, to the other clients on the 

unit, or to the staff, really is enhanced by a manager’s presence. 

So safety would be a significant concern. 

Chairman WALBERG. Mr. Williams, you mentioned ambition rewarded. In your experience as well as those people that you have 

had the opportunity to manage and move up along the chain, how 

does this impact on ambition rewarded, or I guess I would say ambition frustrated? 

Mr. WILLIAMS. The reduction in the number of management persons, as Ms. Hays said, creates a vacuum. So in other words, you 

would not have those management positions available for those 

who are ambitious and want to see their careers rise. They would 

have to wait until those other positions were vacant, and by that 

time they may find other employment or may find something else 

to do. 

But the ability to accelerate through an organization would be 

stifled as a result of that because you just couldn’t afford it. 

Chairman WALBERG. Thank you, and I yield back my time. 

The gentlelady’s time is expired. Thank you. 

I now recognize Mr. Russell, the gentleman from Oklahoma. 

Mr. RUSSELL. Thank you, Mr. Chairman. 

And thank you for your testimony here today. It is a very important issue. 

As a small business owner I find myself in not having flexibility 

for people that could be salaried, to give them the opportunity to 

work for a mission, to get something accomplished, and then later 

be compensated for time, which they consider valuable, to take care 

of their families or their needs. Many times these labor laws that 

we cite as protecting the worker I would argue many times put 

business owners in a difficult position because they cannot give the 

workers the flexibility that they need in a modern age. 


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Mr. Eisenbrey, I would like to ask you a few questions. Does salary make a person more efficient or less on the job, as opposed to 

workers with overtime? 

Mr. EISENBREY. I don’t think it really makes a difference, that 

a worker will be as productive as, you know, his or her desire and 

skills. 

Mr. RUSSELL. So, but you contend here in your testimony that 

salaried workers are being unfairly compensated because they 

work more hours than if they were on some hourly wage with overtime. Is that correct? 

Mr. EISENBREY. Absolutely. 

Mr. RUSSELL. Okay. Well, with that in view, do you think working long hours on a set salary is unfair? And if so, do you think 

it makes the business more effective and workers more effective, or 

does it make them less effective? 

Mr. EISENBREY. Well, you know, the stories that I have heard 

from people like Dawn Hughey are that they worked 90 hours a 

week sometimes and there was nothing good about that. I mean, 

the store was productive but her life was ruined by it. 

Mr. RUSSELL. So nothing good about it, and you said in your testimony that government should use every tool at its disposal to 

help America’s working class. Do you realize that every uniformed 

worker in the military is salaried? So their life just must be miserable, and that organization must be very inefficient because it is 

filled with salaried workers. Is that your contention? 

Mr. EISENBREY. It is not my contention. 

Mr. RUSSELL. Well, then why do you think that the President, 

who has not provided raises to our military—in fact, the numbers 

that you cite are really greater than what the President has provided in raises to the military when he is asking them for all kinds 

of missions that we send across the globe and new missions that 

are unfunded with the dollars that we have at hand. And yet he 

has even threatened that he will veto the National Defense Authorization, which calls for raise for these salaried workers. Well, if you 

think that the President’s initiative is so good, then how do you account that he doesn’t care about the salaried workers that he can 

control? 

Mr. EISENBREY. I don’t think that that is true. You know, I don’t 

know all of the details of the budget negotiations, but they probably involve, you know, a compromise that one side now wants to 

break and have more money for defense and not more money for 

the enforcement of environmental regulations, and health, and welfare, and education. I imagine that that is what is going on, and 

if the President had the ability to increase the budget and increase 

taxes to pay for it, he would give salary raises—— 

Mr. RUSSELL. Well, he has that ability. In fact, when you look 

at the cost of free cell phones, and the cost of his free Internet proposal, and the cost of so many other things, why that could be put 

directly into the wages of privates and our seamen and airmen that 

are out there on the front lines. 

But yet, he thinks that these entitlements are far more important. 

And what I would offer to you is that salaried worker in a company that they take pride in, such as Carl’s Jr., or Hardee’s, or 


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something where they have a path to work their way up, or they 

enjoy it—I served 21 years in the military. I didn’t get rich off of 

that. I moved 15 times in 21 years and raised five kids in uniform. 

That is not a way to the rich house, I can assure you. 

But there wasn’t a time that I didn’t take pride in my job, and 

I was a salaried worker. And as a commander, a 90-hour work 

week? I would have welcomed that. I would have welcomed that. 

And so what I offer to you is that you need to take a step back 

and look at that the salaried workers are not out there to punish 

employees. They are not out there to somehow make their life draconian and exact slave labor and sweat and blood out of these 

workers. It is giving them opportunities to grow. 

And I am sure we have illustrations and testimonies today where 

people started as a fry cook and ended up as franchise owners and 

highly successful people. And so I tend to disagree with the whole 

premise of your testimony today on salaried workers. 

And with that, Mr. Chairman, I yield back my time. 

Chairman WALBERG. I thank the gentleman. With a little fear 

and trepidation I mention that the commander’s time is expired, 

but thank you. 

I now recognize myself, since I am a nonexempt, for my five minutes of questioning. 

And I appreciate the witnesses being here today. 

Let me ask Ms. McCutchen just to think through your background experience, your understanding of the issue a bit, and 

dream a little bit. How would you structure the duties test for the 

21st century workplace? 

And also, speak to what suspicions you might have concerning 

the Department of Labor’s intentions on the duties test subsequent 

to their questioning. 

Ms. MCCUTCHEN. Thank you. I think we did a pretty good job in 

2004, and I think we heard today from one of the witnesses—— 

Chairman WALBERG. Is your mic on, or maybe closer? Yes. 

Ms. MCCUTCHEN. Let me move it closer. 

I think we did a pretty good job when we updated the duties test 

in 2004, and we have—I have heard from my own clients and we 

have heard from the witnesses today that employers are able to 

apply those rules. The concern is that when and if we have another 

major change to the duties test we will see even more litigation as 

employers adjust and try to apply new ones. 

In particular concern is the executive exemption, where the Department of Labor has suggested that they might adopt a California rule, to require 50 percent of an exempt employee’s time to 

be spent only in exempt work, which is not the realities of the 

workplace today. 

We are not in a 1930s industrial economy where you have union 

work and nonunion work. We have exempt employees who, for employee morale and to make sure that businesses are running effectively, pitch in and do nonexempt work, and you shouldn’t lose the 

exemption when you walk to the copy machine and do your own 

photocopies rather than asking your secretary to do it. 

So those types of changes I think would be very concerning and 

not reflect the modern workplace if there are changes. 


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I am concerned that we have not seen any regulatory language. 

In 2004, when we did our comments, you know, we would take out 

a word here and there that we thought were not—didn’t add any 

meaning; we would change—drop a comma for grammatical purposes. And in the comments what we heard was, ‘‘No, dropping 

that word is significant. You can’t drop it. Moving the comma is 

significant. You need to put it back in.’’ 

And because DOL has not given us any regulatory text to react 

to, we cannot be meaningfully engaged in—— 

Chairman Walberg. Give us a little more example on what that 

comma might mean. 

Ms. MCCUTCHEN. Right. Right. It could, well, or an ‘‘and.’’ If you 

change a word from ‘‘or’’ to ‘‘and,’’ that is significant. And since we 

are not going to be able to see the regulatory text before the final 

rule, there is—the process—the rulemaking process is not—won’t 

function like it should in giving the public an opportunity to tell 

the Department of Labor that they have moved the—they shouldn’t 

have changed it to ‘‘and,’’ or they have moved the comma inappropriately. 

Chairman WALBERG. Ms. Hays, you mentioned in your opening 

comments and your testimony that scary phrase, ‘‘This could put 

us out of business.’’ Could it? 

Ms. HAYS. I am going to go back—— 

Chairman WALBERG. Or is that hyperbole? 

Ms. HAYS. No. I am going to go back to my testimony and use 

the words quite literally. We have approximately 50 employees who 

fall into an exempt status that would be affected by this regulation 

change—professionals; therapists, largely; and managers. 

To deliver services to the extent that we are obligated to and contracted to, at the rate of which we are funded, with this imposition 

on our ability to deliver those services and be required to restrict 

so that we could stick to a budget that is, again, already underfunded, is almost an impossibility. 

Therapists and these managers need to have the ability to deliver services in a manner in which we are obligated per regulation 

and in compliance with requirements from third-party insurers to 

Department of Human Services. 

So, you know, it is going to be very difficult for an organization 

like MHY to make good on its commitments—its continuity of care 

obligation—without going over those 40 hours for people who are 

making $40,000, $45,000, $50,000 a year. We are borrowing from 

our foundation right now just to keep the lights on. 

Chairman WALBERG. So we are talking here about not only potential loss of employment, but significant loss of service to people 

who need it who aren’t connected with overtime issues or duties 

issues, but simply need the care that you receive. 

Ms. HAYS. We serve approximately 1,000 clients a year in our 

education program, our residential program, and our community 

services program. Like I said, if we are fully employed we employ 

about 160 people. More realistically, we employ about 140 jobs in 

Mars, Pennsylvania. 

Chairman WALBERG. Okay. Well, thank you. 

My time is expired, and I appreciate so much the questioning of 

my subcommittee as well as the answers, the comments that have 


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been made all across the spectrum today. And it is an important 

issue. We take it seriously here. 

And so now I will recognize the Ranking Member for her closing 

comments. 

Ms. WILSON of Florida. Chairman Walberg, I want to thank you 

again for holding this hearing and giving us an opportunity to discuss the Department of Labor’s proposed overtime rule. 

I want to thank the witnesses for being here today. 

And every time we have these hearings I want to remind my colleagues that what we discuss during these hearings affects the 

lives of working people in our districts. These proposed overtime 

rules will truly change the lives of millions of Americans and make 

good on the promise of a fair day’s pay for a fair day’s work. 

This proposed rule will mean more mothers and fathers will have 

time to care for their children and be involved in their lives. Think 

what that will mean for the next generation of children for them 

to have their parents home just a little more to help them with 

their homework; teach them to throw a baseball; to give them the 

discipline, the supervision, the support, and the love they need to 

grow into strong, smart citizens. 

This proposed overtime rule will mean more American workers 

will find a new job because employers will be encouraged to hire 

more workers instead of overworking a few. It will mean more 

part-time workers will find more hours as employers spread around 

hours. 

Think what that will mean for our economy if more workers had 

jobs and more money to spend. Think what it will mean for our 

country if we get one step closer to guaranteeing a fair day’s pay 

for a fair day’s work for all Americans. 

This overtime rule is for the millions who struggle under the circumstances we have heard discussed today—who work excessive 

hours with no extra pay, who are tormented by the impossible 

choice of keeping the job with absurdly long hours or being unable 

to provide for their families. For all those who are trying as hard 

as possible to make ends meet and to get ahead, this proposed 

overtime rule is for you. 

We are the Workforce Protections Subcommittee. Our job is to 

protect the workers who are the workforce. 

And I want you to know that the Democrats on the Workforce 

and Education Committee, more than 150 Democratic members of 

Congress, and many advocates and organizations represented here 

today will fiercely and fervently fight to defend this much-needed 

update to overtime protections. We will fight to ensure that this 

proposed overtime rule reclaims the fairness owed to millions of 

American workers. 

We will not only fight for this rule, but fiercely defend against 

attempts to erode any existing overtime protections. We will fight 

against efforts to strip workers of their overtime pay that takes the 

insidious form of comp time. 

Allowing employers to give workers paid time off or comp time 

in lieu of overtime may sound great but for the fact that it is the 

employer who gets to choose when and if the employee can take 

that time off. Bills like this amount to more work and less pay for 


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families who are struggling to make ends meet because comp time 

can’t pay the bills, buy bread, or help build our economy. 

Mr. Chairman, I ask unanimous consent that letters from the following organizations be entered into the hearing record: the Center 

for American Progress, the Center for Economic and Policy Research, the National Employment Law Project, the National Partnership for Women and Families, the United Steelworkers 9to5. 

These letters express support for the Department of Labor’s proposed rule to increase the overtime salary threshold. 

[Additional submissions by Ms. Wilson follow:] 


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Ms. WILSON of Florida. Thank you, Mr. Chairman. 

Chairman WALBERG. I thank the gentlelady. And these letters 

have already been received and part of our record. 

Well, again, thank you for this hearing. Thank you for the input 

that you all put in. 

In closing, I would just say that we, as well, are committed to 

making the workplace of the 21st century something that is growing and expanding of opportunity. 

I am not going to use the words that we will fight for it. I want 

to work with all sectors and both sides of the aisle, as well, to make 

sure that we have a workplace that is expanding and growing for 

opportunity—with opportunity for people; that we have certainly 

ambition rewarded and not frustrated; that we have a workplace 

that encourages people with all aspects of their life. 

But understanding the realities, that means we must work together. We can’t have a one-size-fits-all plan. That won’t work. 

Doesn’t work in my marriage, I can tell you that. Doesn’t work 

with my kids or grandkids. We have to have the flexibility that 

moves us forward. 

The duties test. I would hope that the Department of Labor 

would give us a stronger indication—in fact, I would hope and will 

be making strong suggestion and request that they extend the time 

of implementation; that they take time to listen to what was said 

here today, and read the information put in our other hearings as 

well and look to the reality of what is going on. 

Sixty, 70 hours without overtime is a vast overstatement if you 

just take in the context that was pushed out today in so many 

ways, and I hope without intention. But that is the rarity. That is 

not every week. But it deals with the realities of what the workplace entails. 

With an economy that has been very sluggish—with a work 

growth economy that has been very sluggish and is aimed toward 

low income, minimum wage, and not the living wage that we want 

to see take place as a result of the growing economy that is done 

by government getting out of the way as much as possible and letting the grass roots grow what can and has grown in this country 

in the past. 

Employers will adjust. A statement was made here today in testimony. Yes, employers will adjust. We know that. That happens. 

But how will they adjust? Will they adjust by expanding opportunity for more people to grow and find their sweet spot? No. They 

will adjust to meet the needs of staying alive and viable, and that 

doesn’t always work in the best way. 

And so then the next question ought to come: Will employees adjust? Be much more difficult for them if they don’t have the job, 

if they don’t have the opportunity to expand. 

And so I promise to my ranking member as well as my committee and all in the room that we will work toward finding a solution and encouraging the Department of Labor to take a second 

look at a solution that is not a one-size-fits-all, that doesn’t go beyond the reality of the workplace and the workforce in the world 

today and in this country, and to make sure it fits; and we move 

forward, but we move forward in a way that doesn’t break but 

rather expands opportunity. 


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We will talk about this in the future, I am sure, and we look forward to that. 

Having no further business to come before this subcommittee, it 

is adjourned. 

[Additional submissions by Chairman Walberg follow:] 


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[Whereupon, at 12:01 p.m., the subcommittee was adjourned.] 

Æ 


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