On June 28, the US District Court for the Eastern District of Texas issued a temporary restraining order blocking implementation of the Department of Labor’s overtime final rule for Texas state employees.

The following statement can be attributed to PPWO spokesperson Josh Ulman:

“PPWO and many of our members warned DOL that aspects of the rule didn’t comply with the law, and the judge appears to agree. While the scope of the injunction is limited, the chances the rule will be struck down have increased, and DOL should stay the rule pending the outcome of the litigation.”

 

On June 12, the Partnership to Protect Workplace Opportunity and 95 other employer organizations sent a letter to the Department of Labor urging the agency to delay implementation of its overtime final rule pending judicial review.

The following can be attributed to PPWO spokesperson Josh Ulman: 

“There are currently four legal challenges to the Department of Labor’s overtime rule in various federal courts, leaving the rule in legal jeopardy. Despite this legal uncertainty, the rule is currently slated to go into effect on July 1. Implementation of the rule will be costly for both the employer community and the Department, while many workers will face serious repercussions from the rule, including loss of benefits, flexible work arrangements, and workplace status. These consequences should not be made lightly. DOL should, therefore, delay implementation of the final rule to allow the courts the opportunity to consider its legality before the impacted communities are forced to bear its costs.”

On May 22, several business groups filed a lawsuit challenging the legality of the Department of Labor’s overtime final rule. In the complaint the plaintiffs call out DOL for pursuing policy changes that directly contradict the Fair Labor Standards Act and past judicial decisions that clearly prohibited the policies DOL is once again trying to implement with the new rule.

The following can be attributed to PPWO spokesperson Beth Milito, Executive Director of the National Federation of Independent Business’s Small Business Legal Center:

“PPWO applauds the business groups in this case for pursuing this legal challenge to the Department’s unlawful rulemaking. The District Court made it clear in 2017 that it is unlawful for DOL to raise the minimum salary threshold in such a drastic way that the agency essentially makes all other criteria of the overtime exemption irrelevant. Moreover, the court explicitly stated that automatic updates violated the FLSA. DOL should not be allowed to ignore rulings by the judicial branch.

“PPWO hopes the court will prohibit DOL from once again pursuing such misguided policies and for blatantly ignoring its own statutory limitations as dictated by the courts.”

On May 9, the Partnership to Protect Workplace Opportunity sent a letter to the Department of Labor urging them to delay until at least September 1, 2024, the first increase to the minimum salary threshold under the Department’s new overtime final rule.

The following can be attributed to PPWO spokesman Edwin Egee, Vice President, Government Relations and Workforce Development, National Retail Federation:

“DOL is expecting the regulated community to implement a 23% increase to the minimum salary threshold in only two months. This includes small businesses, nonprofit organizations, higher education institutions, state and local governments, and public entities.

“PPWO and the 87 other employer organizations from all corners of the economy that have joined the letter are urging DOL to reconsider their timeline and delay implementation until at the very earliest September 1, 2024. A delay would ensure the employer community can adjust to the new rule appropriately.”

 

On April 23, the Department of Labor issued its final rule altering the overtime regulations under the Fair Labor Standards Act.

The following can be attributed to Partnership to Protect Workplace Opportunity spokesperson Ed Egee:

“PPWO is disappointed in DOL’s decision to issue this final rule without substantive changes from the proposal, despite significant concerns from businesses, nonprofits, higher education institutions, and the public sector.

“The Department is raising the minimum salary threshold over 60%. This raise in labor costs simply cannot be absorbed by businesses, especially small businesses. Meanwhile, automatic increases are unlawful, invite inflation, create uncertainty for businesses, and will exacerbate struggles during economic downturns. Under this rule, many workers will be reclassified and lose workplace status, benefits, and opportunities for growth and advancement.”

On January 10, 2024, The Department of Labor published its final rulemaking altering the criteria for determining worker status as an independent contractor or employee under the Fair Labor Standard Act (FLSA). The final rule applies a multifactor test, where six different factors are considered holistically and could be determinative of a worker’s classification. This is a shift from the 2021 rule which identified two “core” factors that guided worker classification determinations: the nature and degree of the worker’s control over the work; and the worker’s opportunity for profit or loss. The final rule will go into effect on March 11, 2024. 

“We’re disappointed DOL has finalized this rulemaking despite repeated requests from independent contractors, small businesses, and the regulated community to continue classification under the 2021 rule’s methodology,” said Josh Ulman, spokesman for the Partnership to Protect Workplace Opportunity. “The new multifactor test will just make it more difficult for workers to be classified as independent contractors.”

“The DOL is taking autonomy away from workers who prefer the flexibility and independence of independent contractor work arrangements. The majority of independent contractors including women, older Americans, and entrepreneurs would rather work independently than as traditional employees because it allows them to work around home conflicts, health issues, and other jobs. Reclassifying these workers would take away valuable employment opportunities.”

“This rulemaking will lead to a decline in employment. It will reduce opportunities for independent contractors, limit access to affordable project-based labor, and put small businesses reliant on contractors out of business.”

Partnership to Protect Workplace Opportunity Co-Chair Lisa Horn had the following statement on the House Small Business Committee’s hearing, “Damaging Repercussions: DOL’s Overtime Rule, Small Employers, and their Employees:”

We commend Chairman Chabot and the members of the House Small Business Committee for holding today’s hearing to highlight the overwhelming negative consequences of the Department of Labor’s recently issued overtime regulation.  The Committee’s interest is most welcome, as this regulation has quickly become the overriding concern of small businesses, nonprofits, public sector employers, and educational institutions across the country.

These employers are facing challenging and painful decisions as they try to meet the extraordinary demands of the new regulation.  The new salary threshold for determining overtime pay eligibility is more than double the previous level ($47,476 from $23,660), and employers are struggling to absorb such a drastic increase.

As a result of this misguided regulation, many currently exempt, salaried professional employees will have to be reclassified as hourly wage earners–a change that is frequently considered a demotion. Employers will have no choice but to limit employees’ hours to less than 40 per week and reduce access to training opportunities and workplace flexibility. In many cases, employers will be forced to cut critical programming, staffing, and services. In the nonprofit sector, this could mean providing fewer life-saving and other desperately needed services for vulnerable populations.

We are pleased that today’s hearing will shed light on the serious hardships the new overtime regulation imposes on employers, their employees, and the people and communities that they serve.

On June 9, 2016, the Partnership for Workplace Opportunity submitted a letter for the record to the House Committee on Education and the Workforce for the hearing entitled “The Administration’s Overtime Rule and Its Consequences for Workers, Students, Nonprofits, and Small Businesses.”

The letter asks all the members of the Committee on Education and the Workforce to cosponsor H.R. 4773, the “Protecting Workplace Advancement and Opportunity Act”, which would require the Labor Department to conduct a detailed economic analysis before making dramatic changes to federal overtime pay requirements, and would prohibit any automatic increases.

You can read the letter here: PPWO Letter to House Education and Workforce Committee

A statement from the Partnership to Protect Workplace Opportunity (PPWO) about the Labor Department’s final overtime rule:

The public record surrounding the rule is filled with comments, economic analysis, letters from Congress, and meetings and phone calls urging the administration to reconsider its proposal and more carefully examine the potential impact before proceeding. We are deeply disappointed that the Labor Department largely ignored the concerns of tens of thousands of individuals and organizations across this country that expressed concern with the proposal. The final rule increases the salary threshold for overtime eligibility to $47,476 – instead of the $50,440 figure originally proposed. However, this token reduction in the salary threshold is still a 100% increase that will take place all at once in December. Employers will not be able to absorb this increase, particularly in such a short time frame, and DOL’s token reduction will not alleviate the harm this rule will do to these small businesses, nonprofits, colleges and universities, and local governments across the country, their employees and the people and communities that they serve.

Employees and employers – many of which are still unaware of this rule – will be hit hard when it is implemented. Costs will soon increase for organizations operating on fixed budgets, forcing them to cut critical programming, staffing, and services. Millions of employees across the country will be reclassified from salaried to hourly workers and begin experiencing reduced opportunity and flexibility in the workplace. Further, the rule’s automatic increases ignore wider economic variables or the reality of organizations and their specific budgetary constraints. These automatic updates threaten to impose serious hardships on public and private sector employers and employees without regard to economic circumstance of the time, which will have damaging consequences for the communities they serve.

While the nation’s overtime rules should be updated, today’s final rule will do serious damage to people’s careers and workplace flexibility, new job opportunities and essential community services. We will continue to advocate for a regulation that is considerate of all stakeholder and economic realities facing employers and employees across the country. We urge Members of Congress to support the Protecting Workplace Advancement and Opportunity Act.

–        Lisa Horn, PPWO spokesperson and director of congressional affairs at the Society for Human Resource Management.