II 

Calendar No. 661 

114TH CONGRESS 

2D SESSION S. 3464 

To provide incremental increases to the salary threshold for exemptions for 

executive, administrative, professional, outside sales, and computer employees under the Fair Labor Standards Act of 1938, and for other 

purposes. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 29, 2016 

Mr. ALEXANDER (for himself, Ms. COLLINS, Mr. LANKFORD, Mr. SCOTT, and 

Mr. FLAKE) introduced the following bill; which was read the first time 

NOVEMBER 15, 2016 

Read the second time and placed on the calendar 

A BILL 

To provide incremental increases to the salary threshold for 

exemptions for executive, administrative, professional, 

outside sales, and computer employees under the Fair 

Labor Standards Act of 1938, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Overtime Reform and 

5 Review Act’’. 


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1 SEC. 2. INCREMENTAL INCREASES TO SALARY THRESHOLD. 

2 (a) IN GENERAL.—Section 13 of the Fair Labor 

3 Standards Act of 1938 (29 U.S.C. 213) is amended— 

4 (1) in subsection (a)(1), by inserting ‘‘sub5 section (k) and’’ after ‘‘subject to’’; and 

6 (2) by adding at the end the following: 

7 ‘‘(k) REQUIREMENTS FOR SALARY THRESHOLD.— 

8 ‘‘(1) IN GENERAL.—In promulgating regula9 tions for purposes of defining and delimiting the 

10 terms defining employees exempt under subsection 

11 (a)(1), the Secretary shall require that any employee 

12 exempt under such subsection is compensated at a 

13 rate that is not less than the applicable salary 

14 threshold established under paragraph (2). 

15 ‘‘(2) INCREMENTAL INCREASES.— 

16 ‘‘(A) INITIAL THRESHOLD.—The Secretary 

17 shall establish an applicable salary threshold, 

18 beginning on December 1, 2016, that is a rate 

19 of compensation equal to $35,984 per year, or 

20 $692 per week. 

21 ‘‘(B) SUBSEQUENT INCREASES.—Notwith22 standing subparagraph (A) and subject to para23 graph (3), the applicable salary threshold estab24 lished under subparagraph (A) may be in25 creased to a rate of compensation that is equal 

26 to— 


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1 ‘‘(i) beginning on December 1, 2018, 

2 $39,780 per year or $765 per week; 

3 ‘‘(ii) beginning on December 1, 2019, 

4 $43,628 per year or $839 per week; 

5 ‘‘(iii) beginning on December 1, 2020, 

6 $47,476 per year or $913 per week; and 

7 ‘‘(iv) beginning on December 1, 2021, 

8 any rate of compensation provided by the 

9 Secretary in accordance with paragraph 

10 (4) and subsection (l). 

11 ‘‘(3) REQUIREMENTS FOR INCREASES.—With 

12 respect to nonprofit organizations (including non13 profit institutions of higher education), Medicare or 

14 Medicaid dependent health care providers, and State 

15 and local governments, the increases provided in 

16 clauses (i), (ii), and (iii) of paragraph (2)(B) shall 

17 occur only if— 

18 ‘‘(A) the Comptroller General of the 

19 United States conducts and submits the study 

20 under section 3 of the Overtime Reform and 

21 Review Act in accordance with that section; and 

22 ‘‘(B) not later than June 1, 2018, the 

23 Comptroller General, in coordination with the 

24 Secretary and the Chief Counsel for Advocacy 

25 of the Small Business Administration, certifies 


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1 that the increase in the salary threshold under 

2 paragraph (2)(A) from the salary threshold in 

3 effect prior to December 1, 2016, has not— 

4 ‘‘(i) resulted in an increased rate of 

5 part-time employment; or 

6 ‘‘(ii) negatively impacted workplace 

7 flexibility, benefit structures, career ad8 vancement opportunity, or job growth. 

9 ‘‘(4) SALARY THRESHOLD AFTER DECEMBER 1, 

10 2021.—Not prior to December 1, 2021, the Secretary 

11 may issue a rule through notice and comment rule12 making in accordance with section 553 of title 5, 

13 United States Code, to change the rate of compensa14 tion for the applicable salary threshold under para15 graph (2). 

16 ‘‘(5) RULE OF CONSTRUCTION.—Nothing in 

17 this subsection shall require the Secretary to pro18 mulgate the regulations described in this subsection 

19 in accordance with the formal rulemaking provisions 

20 of sections 556 and 557 of title 5, United States 

21 Code.’’. 

22 (b) DEFINITIONS.—Section 3 of the Fair Labor 

23 Standards Act of 1938 (29 U.S.C. 203) is amended by 

24 adding at the end the following: 


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1 ‘‘(z) ‘Medicare or Medicaid dependent health care 

2 provider’ means an employer who derives more than 50 

3 percent of its revenue from payments under the Medicare 

4 program established under title XVIII of the Social Secu5 rity Act (42 U.S.C. 1395 et seq.), a State plan under the 

6 Medicaid program under title XIX of such Act (42 U.S.C. 

7 1396 et seq.), or both.’’. 

8 (c) EFFECTIVE DATE.—This section, and the amend9 ments made by this section, shall take effect on December 

10 1, 2016. 

11 SEC. 3. GAO STUDY. 

12 (a) IN GENERAL.—Not later than March 1, 2018, the 

13 Comptroller General of the United States shall conduct, 

14 and submit in accordance with subsection (c), a study on 

15 the implementation of the salary threshold provided under 

16 section 13(k)(2)(A) of the Fair Labor Standards Act of 

17 1938 (29 U.S.C. 213(k)(2)(A)). 

18 (b) CONTENTS.—The study under this section shall 

19 include each of the following: 

20 (1) The number of small entities affected by the 

21 increase in the salary threshold provided under sec22 tion 13(k)(2)(A) of the Fair Labor Standards Act of 

23 1938 compared to the salary threshold in effect 

24 prior to December 1, 2016. 


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1 (2) An analysis of the impact of such increase 

2 based on regional, State, metropolitan, and non3 metropolitan salary data and cost-of-living dif4 ferences. 

5 (3) The percentile of full-time salaried workers 

6 affected by such increase, including disaggregation 

7 by— 

8 (A) State; 

9 (B) industry subsector; 

10 (C) small organizations; 

11 (D) small government jurisdictions; 

12 (E) nonprofit organizations; 

13 (F) institutions of higher education as de14 fined in section 101 of the Higher Education 

15 Act of 1965 (20 U.S.C. 1001); 

16 (G) Medicare or Medicaid dependent 

17 health care providers, as defined in section 3 of 

18 the Fair Labor Standards Act of 1938 (29 

19 U.S.C. 203); and 

20 (H) small businesses. 

21 (4) Management and human resource costs for 

22 all employers in implementing such increase. 

23 (5) The impact of the increase on lower-wage 

24 industries, including by geographic area. 


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1 (6) All nonfinancial costs associated with the 

2 increase, including the impact on employment (in3 cluding rates of unemployment and part-time em4 ployment), workplace flexibility, employee benefit 

5 structures, career advancement opportunity, new 

6 business formation and termination, and loss of 

7 market share to foreign competition. 

8 (7) The impact of the increase on the number 

9 of individuals in the United States who are ‘‘margin10 ally attached’’ or ‘‘discouraged’’ as defined by the 

11 Bureau of Labor Statistics. 

12 (c) SUBMISSION.—The study under this section shall 

13 be submitted to the Committee on Health, Education, 

14 Labor, and Pensions of the Senate, the Committee on 

15 Education and the Workforce of the House of Representa16 tives, the Committee on Small Business and Entrepre17 neurship of the Senate, and the Committee on Small Busi18 ness of the House of Representatives. 

19 SEC. 4. ENFORCEMENT OF DEPARTMENT OF LABOR RULE. 

20 (a) IN GENERAL.—Beginning on the date of enact21 ment of this Act, or December 1, 2016, whichever date 

22 is earlier— 

23 (1) the rule submitted by the Department of 

24 Labor entitled ‘‘Defining and Delimiting the Exemp25 tions for Executive, Administrative, Professional, 


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1 Outside Sales and Computer Employees’’ (81 Fed. 

2 Reg. 32391 (May 23, 2016)) shall cease to have any 

3 force or effect; 

4 (2) the Secretary of Labor shall not enforce 

5 such rule based on conduct occurring before or after 

6 such date; 

7 (3) an employee shall not have any right of ac8 tion against an employer for the employer’s failure 

9 to comply with such rule at any time prior to or 

10 after such date; and 

11 (4) any regulations that were amended by such 

12 rule shall be restored and revived as if such rule had 

13 never taken effect. 

14 (b) CLARIFICATION.—Notwithstanding subsection 

15 (a), nothing in this Act shall be construed to create a right 

16 of action for an employer against an employee for the 

17 recoupment of any payments made to the employee prior 

18 to the date of enactment of this Act, or December 1, 2016, 

19 whichever date is earlier, that were in compliance with the 

20 rule described in subsection (a)(1). 

21 SEC. 5. FAIR LABOR STANDARDS ACT OF 1938 CLARIFICA22 TION. 

23 (a) SENSE OF THE SENATE.—It is the sense of the 

24 Senate that section 13(a)(1) of the Fair Labor Standards 


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1 Act of 1938 (29 U.S.C. 213(a)(1)), including as in effect 

2 on the day before the date of enactment of this Act— 

3 (1) requires the Secretary of Labor to issue a 

4 new rule through notice and comment rulemaking in 

5 accordance with section 553 of title 5, United States 

6 Code, for each specific and enumerated change to 

7 the salary threshold provided in regulations promul8 gated under such section 13(a)(1), proposed by the 

9 Secretary of Labor; and 

10 (2) prohibits any rule that would result in a 

11 change to the salary threshold for which a specific 

12 and enumerated rate of compensation for the salary 

13 threshold was not proposed, including any procedure 

14 that automatically updates the salary threshold. 

15 (b) FLSA AMENDMENT.—Section 13 of the Fair 

16 Labor Standards Act of 1938 (29 U.S.C. 213), as amend17 ed by section 2, is further amended— 

18 (1) in subsection (a)(1), by inserting ‘‘in ac19 cordance with subsection (l)’’ after ‘‘regulations of 

20 the Secretary’’; and 

21 (2) by adding at the end the following: 

22 ‘‘(l) REQUIREMENTS FOR UPDATING THE SALARY

23 THRESHOLD.— 


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1 ‘‘(1) IN GENERAL.—For any change to the sal2 ary threshold provided in regulations promulgated 

3 under subsection (a)(1), the Secretary shall— 

4 ‘‘(A) propose a specific and enumerated 

5 rate of compensation required for an employee 

6 to be exempt under such subsection; and 

7 ‘‘(B) issue a rule through notice and com8 ment rulemaking in accordance with section 

9 553 of title 5, United States Code. 

10 ‘‘(2) PROHIBITION ON AUTOMATIC UPDATES.— 

11 In accordance with paragraph (1), the Secretary 

12 may not issue any rule that would result in a change 

13 to the salary threshold provided in regulations pro14 mulgated under subsection (a)(1) based on any pro15 cedure that automatically updates the salary thresh16 old without taking each action required under para17 graph (1).’’. 


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Calendar No. 661 

114TH CONGRESS 

2D SESSION S. 3464 

A BILL 

To provide incremental increases to the salary 

of 1938, and for other purposes. employees under the Fair Labor Standards Act trative, professional, outside sales, and computer threshold for exemptions for executive, adminisNOVEMBER 15, 2016 

Read the second time and placed on the calendar 


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