Title: Restoring Overtime Pay Act of 2017
Policy area: Labor and Employment

Summary:
Restoring Overtime Pay Act of 2017
This bill requires the Department of Labor to update the salary threshold applicable to bona fide executive, administrative, and professional employees for purposes of determining eligibility for overtime pay. The bill adopts rulemaking promulgated by Labor in 2016 that established the threshold for exempting such employees from overtime requirements at the 40th percentile of earnings for full-time salaried employees in the lowest-wage census region. The bill also requires updates to the threshold amount every three years.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 2177 Introduced in Senate (IS)]

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115th CONGRESS
  1st Session
                                S. 2177

 To amend the Fair Labor Standards Act of 1938 to establish a minimum 
     salary threshold for bona fide executive, administrative, and 
   professional employees exempt from Federal overtime compensation 
  requirements, and automatically update such threshold every 3 years.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           November 30, 2017

  Mr. Brown (for himself, Mrs. Murray, Ms. Baldwin, Ms. Warren, Mrs. 
   Gillibrand, Mr. Durbin, Mr. Merkley, Mr. Booker, Mr. Markey, Mr. 
Whitehouse, Mr. Franken, and Ms. Harris) introduced the following bill; 
     which was read twice and referred to the Committee on Health, 
                     Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
 To amend the Fair Labor Standards Act of 1938 to establish a minimum 
     salary threshold for bona fide executive, administrative, and 
   professional employees exempt from Federal overtime compensation 
  requirements, and automatically update such threshold every 3 years.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Restoring Overtime Pay Act of 
2017''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) The Fair Labor Standards Act of 1938 (29 U.S.C. 201 et 
        seq.) established overtime compensation requirements for 
        certain employees when they work more than 40 hours in a given 
        workweek.
            (2) Under section 13(a)(1) of such Act, Congress delegated 
        to the Secretary of Labor the authority to define and delimit 
        the terms relating to the exemption for bona fide executive, 
        administrative, and professional employees (commonly known as 
        the ``white collar exemption'').
            (3) For more than 75 years, the Secretary of Labor has 
        exercised its delegated authority to issue regulations that 
        define and delimit the terms relating to the white collar 
        exemption by applying a duties test and applying a minimum 
        compensation level (or salary threshold).
            (4) The Secretary of Labor began utilizing a salary 
        threshold in the initial regulations defining and delimiting 
        the terms relating to the white collar exemption, which were 
        first issued in 1938.
            (5) Congress has long approved the use of a salary 
        threshold by the Secretary of Labor, as demonstrated by the 
        fact that Congress has amended the Fair Labor Standards Act of 
        1938 at least 10 times since 1938 and has not precluded the 
        Secretary from using a salary threshold.
            (6) The salary threshold became woefully out of date and 
        ineffective as a result of not being sufficiently updated to 
        keep pace with a changing economy, as evidenced by the fact 
        that more than 60 percent of all full-time salaried workers 
        earned less than the salary threshold in 1975 and less than 7 
        percent of these workers earned less than the salary threshold 
        in 2016.
            (7) The salary threshold of $455 per week, or $23,660 per 
        year, that was in effect on May 22, 2016, was below the poverty 
        line for a family of 4.
            (8) The Secretary of Labor updated the salary threshold on 
        May 23, 2016, through a final rule entitled ``Defining and 
        Delimiting the Exemptions for Executive, Administrative, 
        Professional, Outside Sales and Computer Employees'' (81 Fed. 
        Reg. 32391) by increasing the salary threshold to the 40th 
        percentile of earnings of full-time salaried employees in the 
        lowest-wage Census Region, resulting in a salary threshold of 
        $913 per week or $47,476 per year.
            (9) The final rule would benefit more than 13,000,000 
        employees by providing overtime compensation protections to 
        4,200,000 new employees and strengthening overtime compensation 
        protections for 8,900,000 additional employees.
            (10) The Secretary of Labor went through a thorough process 
        in crafting the final rule, seeking public input and conducting 
        extensive economic analysis, including--
                    (A) spending more than a year meeting with more 
                than 200 interested parties to obtain input before 
                issuing the proposed rule in 2015;
                    (B) considering more than 270,000 comments received 
                during the 60-day public comment period on the proposed 
                rule; and
                    (C) making significant changes in response to 
                public input before issuing the final rule.
            (11) The public comments submitted to the Secretary of 
        Labor regarding the proposed rule were overwhelmingly positive 
        and supportive of the rule.
            (12) The increase in the salary threshold, included in the 
        final rule, to the 40th percentile of earnings of full-time 
        salaried employees in the lowest-wage Census Region, resulting 
        in a threshold of $913 per week or $47,476 per year, was a 
        strong yet measured increase by almost any measure, including 
        as compared to--
                    (A) the higher salary threshold of $970 per week or 
                $50,440 per year, initially put forward by the 
                Secretary of Labor in the proposed rule;
                    (B) the salary threshold of $984 per week or 
                $51,168 per year, which would have fully accounted for 
                the erosion to the value of the salary threshold since 
                1975 due to inflation;
                    (C) the salary threshold of $1,122 per week or 
                $58,344 per year, which would have covered the same 
                share of all salaried workers as were covered in 1975 
                after accounting for changes in the economy; and
                    (D) the salary threshold of $1,327 per week or 
                $69,004 per year, which would have covered the same 
                percentage of all salaried workers as were covered in 
                1975 without accounting for changes in the economy.
            (13) The United States District Court for the Eastern 
        District of Texas erroneously called the authority of the 
        Secretary of Labor under the Fair Labor Standards Act of 1938 
        into question when it issued a preliminary injunction enjoining 
        the Department of Labor from enforcing the final overtime rule.
            (14) The United States District Court for the Eastern 
        District of Texas issued a final decision invalidating the 
        rule, threatening overtime protections for millions of workers.

SEC. 3. MINIMUM SALARY THRESHOLD FOR BONA FIDE EXECUTIVE, 
              ADMINISTRATIVE, AND PROFESSIONAL EMPLOYEES EXEMPT FROM 
              FEDERAL OVERTIME COMPENSATION REQUIREMENTS.

    (a) Minimum Salary Threshold for Bona Fide Executive, 
Administrative, and Professional Employees.--Section 13 of the Fair 
Labor Standards Act of 1938 (29 U.S.C. 213) is amended--
            (1) in subsection (a)(1)--
                    (A) by inserting ``subsection (k) and'' after 
                ``subject to''; and
                    (B) by inserting ``(except as provided under 
                subsection (k)(3)(C))'' after ``Administrative 
                Procedure Act''; and
            (2) by adding at the end the following:
    ``(k) Minimum Salary Threshold.--
            ``(1) In general.--Beginning on the effective date of the 
        Restoring Overtime Pay Act of 2017, the Secretary shall require 
        that an employee described in subsection (a)(1), as a 
        requirement for exemption under such subsection, be compensated 
        on a salary basis, or equivalent fee basis, within the meaning 
        of such terms in subpart G of part 541 of title 29, Code of 
        Federal Regulations (or any successor regulation), at a rate 
        per week that is not less than the salary threshold under 
        paragraph (2).
            ``(2) Salary threshold.--
                    ``(A) In general.--The salary threshold shall be an 
                amount that, subject to subparagraph (B), is equal to 
                the 40th percentile of earnings of full-time salaried 
                workers in the lowest-wage Census Region as determined 
                by the Bureau of Labor Statistics in accordance with 
                subparagraph (C) and as updated under paragraph (3).
                    ``(B) Increased threshold.--The Secretary may 
                establish, through notice and comment rule making under 
                section 553 of title 5, United States Code, a salary 
                threshold that is an amount based on a rate that is 
                greater than the rate described in subparagraph (A) as 
                determined by the Bureau of Labor Statistics in 
                accordance with subparagraph (C) and as updated under 
                paragraph (3).
                    ``(C) Amount determinations.--The amount of the 
                salary threshold determined under subparagraph (A) or 
                (B) shall be based on data from the second quarter of 
                the year preceding the effective date of such amount.
            ``(3) Automatic updates.--
                    ``(A) In general.--The Secretary shall update the 
                amount of the salary threshold under paragraph (2) 
                every 3 years so that such amount is based on data from 
                the second quarter of the year preceding the effective 
                date of the update.
                    ``(B) Publication of notice.--Not later than 60 
                days before the effective date of any update under 
                subparagraph (A), the Secretary shall publish, in the 
                Federal Register and on the internet website of the 
                Department of Labor, a notice announcing the update.
                    ``(C) Nonapplicability of rule making 
                requirements.--Any update described in this paragraph 
                shall not be subject to the requirements for notice and 
                comment rule making under section 553 of title 5, 
                United States Code.
            ``(4) Duties test.--The Secretary shall, in addition to the 
        requirement under paragraph (1), continue to require employees 
        to satisfy a duties test, as prescribed by the Secretary, in 
        defining and delimiting the terms described in subsection 
        (a)(1).''.
    (b) Effective Date.--This Act, and the amendments made by this Act, 
shall take effect on the date that is 60 days after the date of 
enactment of this Act.
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