March 17, 2016 (Washington D.C.) – The introduction today of legislation halting the U.S. Department of Labor’s anticipated overtime rule reflects mounting and widespread concerns of public-sector, nonprofit, and private-sector employers about the unintentional damage to workers and the U.S. economy such a rule would inflict.
“If these rules go into effect as proposed, we would need to reduce staff and programming,” said Elizabeth Hays, director of human resources at MHY Family Services in Mars, Pa. “And we would need to eliminate the flexible schedules that our employees value. We attract a diverse team of competent people primarily because we offer meaningful work, adequate benefits, and flexible schedules, despite lower salaries.”
The Protecting Workplace Advancement and Opportunity Act, introduced in the Senate and House by Sen. Tim Scott (R-S.C.) and Rep. Tim Walberg (R-Mich.) and cosponsored by Sen. Lamar Alexander (R-Tenn.) and Rep. John Kline (R-Minn.), would delay publication of the Labor Department’s expected regulation, dramatically expanding mandatory federal overtime pay, despite widespread opposition from stakeholders. The bill would require the department to first conduct a comprehensive economic analysis on the impact of mandatory overtime expansion to small businesses, nonprofits, and public employers.
“We are pleased Senators Alexander and Scott and Representatives Walberg and Kline have recognized the burden that this proposed rule will exact on our country’s employers and employees, and we urge Congress to delay the final rule until the Labor Department comprehensively examines its economic impact, as recommended by the Obama Administration’s Small Business Administration,” said Lisa Horn, a spokeswoman for the Partnership to Protect Workplace Opportunity (PPWO).
PPWO is a group of more than 60 employer organizations and companies representing the broad employer community’s response to the proposed overtime rule changes.
The bill was introduced in response to grassroots concern among small and large businesses, nonprofits, municipalities, and schools that the dramatic changes proposed by the Labor Department will not only result in an estimated cost of $8.4 billion per year, but will reduce opportunity and flexibility for millions of executive, professional, and administrative employees.
“Our members believe that employees and employers alike are best served with a system that promotes maximum flexibility in structuring employee hours, career advancement opportunities for employees, and clarity for employers when classifying employees,” said Horn, who is also director of congressional affairs at the Society for Human Resource Management, which co-chairs PPWO along with the College and University Professional Association for Human Resources.
PPWO expects many more lawmakers to sign onto the bill as they hear from their constituents in coming days.
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About PPWO: The Partnership to Protect Workplace Opportunity consists of a diverse group of associations, businesses, and other stakeholders representing employers with millions of employees across the country in almost every industry. The Partnership is dedicated to advocating the interests of its members in the expected regulatory debate on potential changes to the Fair Labor Standards Act (FLSA) overtime regulations. For more information: www.protectingopportunity.org
On February 25, 2016 the House Committee on Education and the Workforce held a hearing on the Every Student Succeeds Act where Acting Secretary of Education John B. King Jr testified. During the hearing Representative Mike Bishop implored Secretary King to speak with Secretary of Labor Perez about the unintended consequences the Department of Labor’s overtime proposal will have on colleges and school districts in his area. You can see the exchange below:
Today, the Partnership to Protect Workplace Opportunity submitted PPWO Comments on behalf of 133 organizations to the U.S. Department of Labor in response to recently proposed regulations dramatically changing the criteria for executive, administrative, professional, outside sales, and computer employee exemptions to the federal overtime pay requirements.
The Partnership is extremely concerned that the Administration’s proposal to increase the minimum salary level by over 100 percent will force employers to reclassify millions of salaried employees in managerial and other traditional white collar positions to hourly jobs, leading to fewer opportunities for workplace flexibility and career advancement and diminished employee morale. Furthermore, the Partnership expressed concern that the proposal to automatically index the salary level creates enormous uncertainty for employers and fails to account for changes in economic conditions in the future.
The Partnership, alongside over 600 employers large and small, members of Congress and the Small Business Administration requested an extension to the comment period to allow a greater number of employers and employees to weigh in on this proposal. The Department unfortunately ignored the requests for an extension. The Department’s minimal comment period limits debate and public feedback on this important issue and contrasts sharply with previous updates to the overtime regulations in 2004.
Many members of the Partnership also met with the Secretary of Labor at the outset of the process to express concerns with possible approaches the Department might take. The proposed regulation shows no indication that the Department listened during those meetings.
The PPWO consists of a diverse group of associations, businesses, non-profits and other stakeholders representing employers with millions of “white-collar” employees, across the country in almost every industry who will be affected by the proposed changes. The PPWO’s members believe that employees and employers alike are best served with a system that promotes maximum flexibility in structuring employee hours, career advancement opportunities for employees, and clarity for employers when classifying employees.
For more information: www.protectingopportunity.org
In an August 3rd op-ed, Sweeney, president and CEO of the National Restaurant Association, Caldeira president and CEO of the International Franchise Association and Lugar, president and CEO of the American Hotel & Lodging Association wrote about the impact the new rule will have on the industry:
We share the department’s goal of setting a standard salary level for full-time salaried employees that “adequately distinguishes between employees who may meet the duties requirements of the EAP [employee assistance program] exemption and those who likely do not, without necessitating a return to the more detailed long duties test.” However, under the proposed revisions, the threshold for requiring employers to pay overtime would more than double from the current $23,660, or $455 a week, to $50,440, or $970 a week. Increasing the threshold by such a drastic amount will cause labor costs to dramatically increase. This will have a severe, negative impact on many of the employees the regulation was specifically intended to help while also driving a wedge between hourly and salaried employees.