While you were enjoying the summer months, the U.S. Department of Labor proposed sweeping revisions to expand the number of workers covered by overtime wage rules impacting most small businesses and the private sector in the US. In soliciting comments from the public, the Department of Labor advocates paying employees now exempt from overtime wages. Under present law, an employee must make under $23,660 annual salary to secure overtime wages. In these rules the administration is seeking to raise that limit to $50,400, covering many executive, administrative or professional employees that are not currently covered. ESA submitted its comments on Sept. 4th to the over 100 page proposed Overtime Rules and pointed out that the document submitted for comments (from the Federal Register) included the admission that these rules would lead to a transfer of an estimated $1,435.8 trillion to employees from employers, due to the overtime pay provisions.
ESA pointed out to the Department of Labor that these extra costs to employers have to come from somewhere-“profits from the business, increased costs passed onto customers, or have employees work less hours or reduce their hourly rates.”
“We join with others in the business community to express our great concerns that these regulations will hurt our members, their customers, suppliers, family and others, not to mention the adverse impact on the economy as a whole,” said ESA President Marshall Marinace.
It is anticipated that the overtime rules proposed by the Department of Labor will be issued in the next 60 days by the administration and that Congress will consider legislation to reverse the decision, which is not likely to pass should any bill reach the President’s desk and incur an anticipated veto. This would require a two-thirds vote to override the veto which will not succeed until a new Congress is selected next year.
The proposed overtime wage increase coverage rules for employees was not the only summer labor actions undertaken by this administration. At the end of August, the National Labor Relations Board (NLRB) issued a decision in one of their legal cases that redefines employer relationships with independent contractors, subcontractors, franchisees, temps and many other business relationships ruling that now businesses can be liable for labor violations and open to law suits for these alleged violations. The NLRB reversed decades of business practices where an employer had to exercise direct control over workers and now they have expanded what is called “joint employer” relationships, which could be expanded to include any law related to the workplace or in other statutes from equal employment/civil rights laws to disability statutes. The opponents to this ruling in the Congress will have legislation seeking to reverse the decision. On Aug. 27, 2015, the day of the NLRB ruling, the Chairman of the House Education and the Workforce Committee, Rep. John Kline (R-MN) issued a statement that he would work to “roll back this flawed decision.” ESA is working with supporters in the business community and in Congress on this and many other federal issues.