Alexander: Revised Obama Labor Rule Could Increase Tuition at One Tennessee College Nearly $850 per Student

“If the president wants to talk about keeping college costs down, how can he justify a rule that may cost the colleges’ students in tuition hikes and cost employees in job cuts?”

MARYVILLE, Tennessee, May 4 – Senate labor committee Chairman Lamar Alexander today said that the administration’s reported plans to revise its proposed overtime rule “won’t do much to protect students from tuition hikes”—as one Tennessee independent college estimated the revised rule could increase tuition by nearly $850 per student.

Politico reported last week the administration is planning to lower the salary threshold in its forthcoming rule to extend overtime coverage from $50,440 to $47,000, meaning employers would be required to pay overtime to workers making a salary of $47,000 or less. Today, employers must pay overtime to workers who make a salary of $23,660 or less.

“The Labor Department’s reported new proposal is no favor to Tennessee college students who attend the state’s independent colleges, as one Tennessee independent college has estimated that the revised rule could increase tuition by nearly $850 per student, and at least two independent colleges in Tennessee are expecting their costs to increase more than $1 million annually thanks to the department’s proposal,” said Senator Lamar Alexander (R-Tenn.). “If the president wants to talk about keeping college costs down, how can he justify a rule that may cost students in tuition hikes and cost employees in job cuts? I have joined Senator Scott in introducing legislation to overturn this disastrous proposal and will consider all options to help protect Tennessee colleges and businesses alike.”

In 2015, the Department of Labor released a proposal that would more than double the salary threshold under which employees qualify for overtime pay. The department’s proposed rule will result in workers having less flexibility and opportunity for advancement in the workplace. 

At an Appropriations subcommittee hearing on March 17, Senator Alexander asked U.S. Secretary of Labor Tom Perez why the Labor Department would move forward with its proposed Overtime Rule “if the president is going to go around, saying ‘we want to keep college costs down.’”

Also on March 17, Senator Alexander joined Senator Tim Scott (R-S.C.), House Subcommittee on Workforce Protections Chairman Tim Walberg (R-Mich.), and House Committee on Education and the Workforce Chairman John Kline (R-Minn.) in introducing the Protecting Workplace Advancement and Opportunity Act, which will:

•        Prevent the department from finalizing a proposal that will limit opportunities for employees and place significant burdens on job creators;
•        Require the department to fully and accurately consider the economic impact of any rule on small businesses, nonprofits, schools, and others who will be affected;
•        Ensure future changes to the salary threshold accurately reflect the economic realities facing workers and employers by making clear automatic increases are not allowed under current law; and
•        Promote transparency and accountability by requiring any changes to the duties tests be made available for public review and comment.

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For access to this release and Chairman Alexander’s other statements, click here.